Continued cedi depreciation is affecting economic activities- Terkper

The Finance Minister Seth Terkper has blamed the loss of foreign exchange as one of the factors contributing to the  depreciation of the local currency.

According to him, the rapid fall of commodity prices on the world market, especially gold and cocoa impacted negatively on the country's foreign exchange which also led to the depreciation of the country's currency.

"The Ghana Cedi generally traded weak against the currencies of the major trading partners during the review year. In the Inter-Bank Market, the Ghana Cedi recorded cumulative annual depreciation of 14.6 percent against the US dollar during the review period. This is lower than the 17.5 percent annual depreciation recorded in 2012. The Ghana Cedi recorded relatively higher depreciation of 16.7 percent and 20.1 percent against the Pound Sterling and the Euro, respectively, in 2013," the minister said while presenting a Supplementary Budget on the floor of Parliament, Wednesday.

In 2014 the cedi has seen no sign of stability with the minister admitting the depreciating cedi is badly affecting economic activities in the country.

Fuel prices were only last Monday increased due largely to the depreciation of the cedi, a situation which led to the increase of transport fares.

"While the depreciation could be positive for some exporters its impact to some extent affected fixed income earners, inflation, interest rates and economic activities," he said.

Seth Terkper  again blamed speculative activities of some banks and forex bureaus and the growing insatiable demand for foreign products as some of the major factors contributing to the poor performance of the cedi.

He assured however, that government is working assiduously to arrest the phenomenon.

He said government is in discussion with business community allowed to retain significant foreign exchange to channel those funds through the Bank of Ghana and the domestic banks.

According to him, the government has taken steps to review the "unintended consequences" recent forex measures introduced by the Bank of Ghana is having on economic activities.

The Bank of Ghana in February 2014 introduced a number of measures it hoped would arrest the continued fall of the cedi. The measures were hugely criticized as too restrictive and counter-productive.

The Finance Minister agreed the measures have had some unintended consequences  on the economy and promised government was going to rectify the anomaly.

Terkper indicated that his outfit will also take steps to enforce the president's directives to Ministries Department and Agencies to use made in Ghana goods all in an attempt to shore up the cedi.