What the hell is going on? – Franklin Cudjoe on cedi depreciation

Founding President of policy think tank, IMANI Africa, Franklin Cudjoe has expressed shock at the perennial sharp depreciation of the Ghana Cedi as against major currencies of other countries, particularly the US dollar.

He observed that the Ghana cedi which was 5.35 against a dollar yesterday February 25, 2019, has suddenly reached 5.46 in less than 24hours.

The IMANI boss questioned the Bank of Ghana on what exactly is happening to the Ghana cedis and wondered why the central bank compares the performance of the cedi to currencies of Argentina, South Africa and Brazil.

Franklin Cudjoe in a Facebook post maintained that the advisors of the BoG are not doing any good to the bank as authors of a report on the website of the Central Bank have created “their own fictional models for analysing the cedi’s plummeting woes by comparing the cedi’s performance with the likes of Argentinean peso, South Africa’s rand and Brazil’s real and how the dollar and the US federal reserve’s minimal interventions via interest rates have impacted the cedi’s performance”.

According to him, “Argentina, South Africa and Brazil are not good comparators. These two countries have had extremely poor and corrupt leadership leading to economic atrophy until months ago.”

He explained that a review of the publication exposes the authors as they failed to focus in greater detail on the impact of domestic policy making on the cedi.

”Just take a look at the various populist interventions at play even with industrialisation- mostly uneconomic. Export credits are largely politicised, humongous tax exemptions are mostly politically arranged jumping by almost 170% in 2018(the President even complained about it in his recent state of the nation address) dubious trade and port facilitation initiatives such as UNIPASS and Cargo Tracking Notes, rudderless luxury taxes and an overall dodgey procurement processes for most of our primed assets and technology services,” Mr. Cudjoe detailed in his Facebook post.

BoG introduces new forex market regulations to help stabilize cedi

The Bank of Ghana (BoG) has introduced some regulations to streamline trading of dollars and other major foreign currencies in the country to help stabilize Ghana cedi.

According to the BoG, the new market directives will help regulate the conduct of interbank foreign exchange business in the Ghanaian financial market.