Professor of Applied Economics at the Johns Hopkins University, Steve Hanke, has asserted that Finance Minister Ken Ofori-Atta has lost touch with reality when it comes to how the Cedi is fairing.
In a Twitter post on September 29, he said Ofori-Atta was ‘dreaming’ to think that measures being implemented by the Bank of Ghana to ensure the Cedi regains it value were ‘paying off’.
“#Ghana's Finance Minister Ken Ofori-Atta says the Bank of Ghana's efforts to contain #cedi depreciation are "paying off." SPOILER ALERT: Ofori-Atta must be dreaming. Since Jan. 2020, the cedi has depreciated ∼40% against the USD,” Prof Hanke tweeted.
The economist who runs a project called ‘Troubled Currencies’ has consistently written off the local currency as the ‘central bank junk currency’ insisting that the only way to curb it depreciation was the installation of a currency board.
The Cedi has in recent times been experiencing a free fall against major trading currencies such as the US dollar.
At a point, some forex bureaus sold a dollar at GH¢10. The Bank of Ghana through its frequent hiking of the monetary policy rate has been trying to curb the situation.
The Finance Minister at a briefing on September 28 outlined other measures such as a Special Foreign exchange auction for bulk distribution companies and a Gold Purchase Programme which the central bank was implementing to stabilize the fall of the Cedi.
“As part of measures to shore up our reserves, improve exchange rate stability and address some of the funding needs, the Ministry successfully worked on a US$750 million Afreximbank loan facility which was received in August 2022,” he explained.
“The traditional Cocoa Syndication Loan, expected in the last quarter of 2022 which will promote the cocoa sector, will further help us build our FX reserves and provide a strong buffer for the cedi in the last quarter of the year,” Ken Ofori-Atta added.
As at July this year, for instance, the cedi lost its value by more than 20 percent to the US dollar.
In addition, recent economic downgrades by international rating agencies such as Fitch and Standards & Poors’ has also impacted the investor community at large, while Ghana awaits an International Monetary Fund, IMF, support programme which is expected to be accessible in 2023.
#Ghana's Finance Minister Ken Ofori-Atta says the Bank of Ghana's efforts to contain #cedi depreciation are "paying off." SPOILER ALERT: Ofori-Atta must be dreaming. Since Jan. 2020, the cedi has depreciated ∼40% against the USD.https://t.co/QK93tOONpJ
Professor Steve Hanke and Finance Minister, Ken Ofori-Atta