Cedi performance: Jubilation well-placed but improve macro economic mgt to hold up – Govt told

The Government of Ghana has been urged to improve on the macro economic management in order to hold on to the gains made by the Cedi against the Dollar in the long term.

The Cedi has since the start of December 2022, been gaining strength against the major trading currencies particularly, the Dollar.

Per the Bank of Ghana (BoG) rate, the Cedi, as of Thursday December 15, was buying at GHS7.9975 to a Dollar and and selling at GHS8.0056 to a Dollar.

This development is being celebrated by Ghanaians especially members of the governing New Patriotic Party (NPP).

For instance, Nsawam Adoagyiri lawmaker Frank Annoh-Dompreh said “Men at work indeed… We shall surely succeed on this and many others!..”

Men @ work indeed…
We shall surely succeed on this & many others!..@JDMahama @MBawumia pic.twitter.com/yMIxgfcofI

— Hon. Frank Annoh-Dompreh (@FAnnohDompreh) December 16, 2022

Reacting to this trend, the Vice President of Imani Africa Bright Simons indicated “The people deserve this happiness after the stress of recent months. But the leaders should worry about ANY wild swings. Volatility of this type is a sign of fever not recovery,” he said.

He further explained that “Eventually a currency moves to its ‘real effective exchange rate’ as measured by macroeconomic differentials between Ghana and its main trading partners. That is the only guide to how the Cedi will perform over coming months.

“Macro management has to improve in Ghana for Cedi to hold up,” he stressed.

For his part, the Director of Research at the Institute of Economic Affairs (IEA) Dr John Kwakye attributed the Cedi’s improved performance against the Dollar to reduction in speculations in the financial market.

Dr Kwakye asked the government to act immediately to consolidate the gains made.

In a tweet, he said “Unless the cedi is backed by improved economic fundamentals, its stability will not last. The current stability is riding only on the back of reduced speculation.”

He added “The cedi appreciation is a correction to largely speculation-fueled depreciation. However, the extreme volatility in the exchange rate is not good for the economy.”

The cedi appreciation is a correction to largely speculation-fueled depreciation.
However, the extreme volatility in the exchange rate is not good for the economy.

— J. K. Kwakye (@JohnKwabenaKwa1) December 15, 2022

“The question is how long will the cedi stability last? We have been here before. The way to ensure lasting cedi stability is to address the economy’s structural weaknesses while building strong financial buffers,” Dr Kwakye further stated.

Source: 3news.com|Ghana