30th September 2022 11:02:30 AM
2 mins readFinance Minister Ken Ofori-Atta, according to Johns Hopkins University professor of applied economics Steve Hanke, has lost touch with reality on the performance of the Cedi.
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On September 29, he said in a tweet that Ofori-Atta was "dreaming" to believe that the Bank of Ghana's efforts to ensure the Cedi regains its value were "paying off."
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The Bank of Ghana's attempts to control cedi depreciation, according to Ken Ofori-Atta, Ghana's finance minister, are "paying off."
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Ofori-Atta must be dreaming, spoiler alert.
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"The cedi has lost over 40% of its value against the USD since January 2020," Prof. Hanke tweeted.
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The economist who runs a project called ‘Troubled Currencies’ has consistently written off the local currency as the ‘central bank junk currency’ insisting that the only way to curb it depreciation was the installation of a currency board.
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The Cedi has in recent times been experiencing a free fall against major trading currencies such as the US dollar.
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At a point, some forex bureaus sold a dollar at GH¢10. The Bank of Ghana through its frequent hiking of the monetary policy rate has been trying to curb the situation.
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The Finance Minister at a briefing on September 28 outlined other measures such as a Special Foreign exchange auction for bulk distribution companies and a Gold Purchase Programme which the central bank was implementing to stabilize the fall of the Cedi.
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“As part of measures to shore up our reserves, improve exchange rate stability and address some of the funding needs, the Ministry successfully worked on a US$750 million Afreximbank loan facility which was received in August 2022,” he explained.
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“The traditional Cocoa Syndication Loan, expected in the last quarter of 2022 which will promote the cocoa sector, will further help us build our FX reserves and provide a strong buffer for the cedi in the last quarter of the year,” Ken Ofori-Atta added.
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As at July this year, for instance, the cedi lost its value by more than 20 percent to the US dollar.
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In addition, recent economic downgrades by international rating agencies such as Fitch and Standards & Poors’ has also impacted the investor community at large, while Ghana awaits an International Monetary Fund, IMF, support programme which is expected to be accessible in 2023.
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