Vice President Dr Mahamudu Bawumia has revealed on Tuesday, August 25 that the rate of the Cedi depreciation has been reduced by 50 per cent.
Speaking on Peace FM’s Kokrokoo on the performance of the government in the management of the economy, Dr Bawumia said: “Ghana runs a flexible exchange rate regime and not a fixed exchange rate regime.
“So the exchange rate will be dependent on the market forces but fundamentally the exchange rate will be determined by the inflation rate, [with] all other things being equal.
“So if you have high inflation, you will have higher depreciation. If you have lower inflation, you will get a lower depreciation. So that is the fundamental rule. We didn’t say we were going to lock the exchange rate at one rate but essentially lock it within the range of fundamentals such that the lower inflation rate will produce a lower depreciation rate [of the Cedi].
“Before we assumed office in 2017, the cedi was depreciating at 18 percent annually on average. But during our tenure from 2017 to 2019 it was 8.7 percent on average. So it is 18 percent versus 8 percent. So we have reduced by 50 percent the rate of depreciation of the currency.”
He accused the NDC of quadrupling the depreciating rate of the Cedi in its 8-year governance of the country.
“The way the currency was going under the NDC administration, the currency was 1 Ghana Cedi to 1 dollar almost at that time [2009] but they left office with 4 Ghana Cedis to 1 dollar.
“So it was a quadrupling of the nominal rates of the Cedi and if it had followed on that trajectory, it would have been 16 Ghana Cedis to 1 dollar.”
By Laud Nartey|3news.com|Ghana