Togbe Afede XIV, the Agbogbomefia of the Asogli State, has expressed concern about the impact of the Bank of Ghana's (BoG) high interest rates on the stability of the Ghanaian cedi.

He emphasized that as long as interest rates remained "unnecessarily high," the Ghanaian cedi would continue to face detrimental consequences.

The BoG recently highlighted forecasts indicating a potentially elevated trajectory, citing factors such as potential adjustments in transport fares, utility tariffs, and higher fuel prices. The Central Bank stated that these factors collectively contribute to economic pressures and could influence the country's financial landscape.

In a piece dated April 11, 2024, Togbe Afede XIV expressed his belief that the stability of the cedi would significantly affect other prices, including transport fares, utility tariffs, and fuel prices. He underscored the interconnectedness of various economic variables and the repercussions of interest rate policies on overall economic stability.

According to the respected chief, the persistence of unnecessarily high interest rates exacerbates the challenges faced by the cedi, amplifying its vulnerability to adverse consequences. Togbe Afede XIV urged the central bank to take proactive measures and reassess its approach to interest rate management to mitigate the negative impacts on the currency's stability.

“The truth is, all these variables are related. Whilst the policy rate is an important tool of monetary policy, its misuse, as in our case, can have damaging effects. As long as interest rates are kept unnecessarily high, our currency, the cedi, will continue to suffer adverse consequences, with pass-through effects on other prices, including transport fares, utility tariffs and fuel prices."

“Persistent cedi depreciation has been a key factor in our energy (including power) sector problems. We have always felt the need to adjust prices, not because consumers were not paying enough, but because the cedi has been depreciating," he said.

Currently, there has been a surge in demand for the dollar and other major foreign currencies, leading to a sharp depreciation in recent times. The dollar is currently trading at about GH¢14.50 to one US dollar and GH¢18.00 to one British pound in the retail market.