Cedi Recovering Against Major Currencies Is A Temporary Measure – PAC Chairman

Though the Central Bank’s review of its directives on the use of foreign exchange (forex) to save the free fall of the Cedi is having a positive impact on the local currency, the chairman of the Public Account Committee (PAC) Hon. Kweku Agyeman Manu has cautioned that the appreciation of the Cedi is short term.

According to the NPP MP for Dormaa Central, the Cedi has started appreciating due to the loans the government has gone in for to sustain the local currency; thus it will take stringent measures from the government to sustain the local currency as the loans alone are not enough to stabilize the Cedi.

The Bank of Ghana had earlier directed in February, this year that all local transactions should be made in the local currency to stop the Ghana Cedi from further depreciating against major currencies.

It also placed a limit on how much monies from forex bureaus could be withdrawn at the counter, among other directives.

However, while the directive was in force, the Ghana Cedi’s situation worsened as it fell by up to 40 per cent within the first half of the year.

The situation forced the central bank to review its directives, following strong agitation by the public, including actors in the business sector, because of the negative impact on businesses in particular and the economy generally.

However at the forex bureaux, on the average, one dollar was bought at GH¢ 3.1, and sold for GH¢3.7; One pound was bought at GH¢5.6, and sold for GH¢ 6, while an Euro was bought at GH¢3.9, and sold for GH¢4.6.

Speaking on Okay Fm’s Ade Akye Abia Morning Show, the former Deputy Minister of Finance in the erstwhile Kufuor administration posited that the appreciation of the Cedi has to do with the $1 billion Eurobond and the $1.7 billion Cocoa Syndicated Loan.

“……appreciation of the Cedi is a temporary measure because if the government does not use the loans wisely and put up sound economic measures, the cedi will depreciate again…..the dollar has sustained the falling cedi because of the loans and it will take good measures to maintain the local currency”, he cautioned.

Source: Daniel Adu Darko/ Peacefmonline.com/gh [Email:bigdallas1985@gmail.com]