The Executive Director of the Institute for Fiscal Studies (IFS), Professor Kwadwo Kusi has downplayed the impact of Bank of Ghana’s move to inject $20 million daily into the money market to stabilize the cedi.
According to him the Central Bank is refusing to tackle the real cause of the poor performance of the cedi against the major trading currencies.
[contextly_sidebar id=”nsktDLvdJ3Ptb91Po6MWTbsPhKrK2ras”]In 2015 year alone, the cedi has depreciated in excess of 20 percent.
The Central bank is pumping in more dollars to improve the situation.
The former economic advisor to government Professor Kusi however noted that the move will not work.
He observed that “last year, when it happened like that, Wampah was pumping $20 million into the system.”
“Pumping 20 million a day is not the solution,” he said adding that what the Bank of Ghana has to do is to “find out why the cedi is depreciating.”
“You may say it’s because demand more than exceeds supply, why is demand exceeding supply? We need to go back to address the core source of the cedi depreciation. Fiscal deficit, investors, everybody is losing confidence in the system.”
In a related development, financial analyst, Sydney Casely Hayford has accused the Bank of Ghana (BoG) of lying to Ghanaians about the injection of $20 million daily into the money market to stabilize the cedi.
“They [BoG] are lying to us; they can’t afford $20 million a day.”
Per his estimation, “$20 million a day will translate to about $600 million in a month. Where is the money coming from? This is where the whole problem starts.
The financial analyst argued that if the BoG can make $600 million in a month, then going for the bailout package from the International Monetary Fund (IMF) was not necessary.
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By: Godwin A. Allotey/citifmonline.com/Ghana