The cedi is depreciating but the Bank of Ghana says the economic fundamentals are still solid

Since January 2019, the cedi has reduced in value against the dollar from GHC4.90 to ghc5 and above in some quarters.
This is a cause of worry for many Ghanaians especially traders in the country.
Many have wondered if the country's economic fundamentals are still strong.

The Bank of Ghana (BoG) has said that despite the current depreciation of the cedi against major trading currencies especially the dollar it has not affected Ghana’s economic fundamentals.

According to the Director of Treasury at the Bank of Ghana, Steven Opata, the economic fundamentals are good and the BoG is expecting the cedi to bounce back soon.

“If you look at the fiscal situation, it has improved significantly, if you look at the trade account, it’s been very solid. The current account has also been improving. The fundamentals are solid,” he told Accra-based Citi FM.

The general Ghanaian public especially the business community has expressed concern about the recent depreciation of the Cedi and its impact on livelihoods.

Since January 2019, the cedi has reduced in value against the dollar from GHC4.90 to GHC5 and above in some quarters.

This is affecting traders particularly importers who say they are making losses instead of profits.

Vice President Dr Mahamudu Bawumia, who is also the head of the government’s economic team, has been criticised for not being able to save the cedi from depreciating especially when he promised that they will change things when they assume office.

But Mr Opata said that the BoG and the government have put measures in place to help the cedi recover.

“The exchange rate we run in Ghana is a flexible exchange rate regime. The focus should not be on targeting a number because if you do that you may not be getting the whole picture. What are not targeting 5, 6, neither are we targeting 4. What we are looking at is that the currency should not be volatile,” he added.

Meanwhile, Dr. Bawumia’s Economic adviser and spokesperson, Dr Gideon Boako also corroborated Mr Opata’s assertion.

“Given that we have opted for a regime of flexibility, we will see some level of depreciation. What we want is to bring some level of stability to slow the depreciation rate…I’m not saying that at GHc5 to the dollar, market players won’t lose money but with a stable rate of 3% instead of an uncertain rate, people can then plan.”