Former Finance Minister, Dr Kwabena Duffuor
Ghana cedi under intense pressure, Bloomberg survey
Bawumia’s rhetoric exposed by weak exchange rate, Duffour
Investors on international capital market exit from Ghana’s bonds
Dr Kwabena Duffuor, a former Bank of Ghana Governor has said poor economic management has resulted in the woeful performance of the local currency on the foreign exchange market.
According to him, incompetence on the part of Vice President Dr. Mahamudu Bawumia has been widely exposed due to Ghana’s weak exchange rate regime.
Speaking on GHONE TV on Monday, December 6, 2021, Dr. Kwabena Duffuor said the cedi keeps depreciating at a much faster rate against the US dollar hence claims made by Dr Bawumia before seeking to stabilise the local currency has proven to be mere rhetoric.
“There are challenges obviously, look at the cedi for example, when I was in office [2012] you needed 1 cedi 88 pesewas to get a dollar but now you need 6 cedis 20 pesewas to get a dollar. Years ago, Dr. Bawumia said when the fundamentals are weak the exchange rate will expose you, the exchange has exposed the government now, meaning the fundamentals are weak by Bawumia’s own explanation,” he explained.
“The cedi is running and he promised that he will arrest the cedi, where is he, Dr Bawumia the cedi is running arrest it. He also made a point that he had worked at the central bank and that there was soo much money and we didn’t have to go and borrow, what has happened during his term,” Dr. Duffuor continued.
Meanwhile, the Ghana cedi has come under intense pressure as the year comes to an end.
According to a recent Bloomberg survey, the cedi is classified among African currencies with the ‘Worst Spot Returns’ and is now ranked 14th among 20 top African currencies tracked by Bloomberg after being the best performing currency in Africa in the first quarter of 2021.
The survey however attributed this to increased corporate demand for the US dollar and the exit of Ghana’s bond by some foreign investors on the international capital market.
Over the past few months, the cedi has succumbed to pressures from the foreign exachange market, losing more grounds to the dollar. Bloomberg has however, put the depreciation of the cedi at 4.05%, though the Bank of Ghana data shows a lower decline in value of the local currency to the US dollar.