Dr. John Kwakye, Director of Research, Institute of Economic Affairs (IEA), has backed up US-based economist and Johns Hopkins University Professor Steve Hanke’s claim that the Ghana cedi can only be stabilized by a currency board.
He thinks the cedi can have long-term stability under a monetary structure akin to a currency board.
However, Dr. Kwakye cautioned that the economic administrators must establish the currency board gradually.
I concur with Prof. Hanke that the cedi can only have long-term stability under a monetary system akin to a currency board.
But we should advance in that direction gradually.
The complete modalities can be figured out, according to a 3news report by Dr. John Kwakye.
Prof Steve Hanke, a US-based economist, has consistently called for installing of a currency board if the managers of the Ghanaian economy want the Ghana cedi, which has depreciated against the US dollar to stabilise.
He noted in his October 20 tweet that the cedi has depreciated by 43.98% against the US dollar since January 2022 to be placed 4th on his weekly Hanke’s currency watchlist.
He said, for the cedi to gain its strength and appreciate against the US dollar, the President together with the managers of the Ghanaian economy must install a currency board.
“The Ghanaian cedi has depreciated against the USD by 43.98% since Jan 2022, which is why #Ghana takes the 4th place in this week Hanke’s #CurrencyWatchlist. To save the cedi, GHA must install a #CurrencyBoard, NOW,” Prof. Steve Hanke’s tweeted.
The Cedi has recently been classified by Bloomberg as the worst-performing currency against the US Dollar.
Currently, the Cedi is trading at above GH¢14 to a dollar at some forex bureaus. The depreciation rate is a contributory factor for the ongoing shop closures ordered by the Ghana Union of Traders Association (GUTA).
According to the group, the fast depreciation of the Cedi is eroding their profits and also increasing the cost of doing business.