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Measures implemented to halt cedi decline not strong - Economist

By Joy Business
Economy & Investments Measures implemented to halt cedi decline not strong - Economist
MAY 28, 2015 LISTEN

Economist Professor Peter Quartey says measures being implemented by government to halt the cedi's decline are not robust enough to achieve the desired results in the short -term.

The Ghana cedi from the beginning of the year has gone down by some 20 percent in value against the dollar.

Government has been criticized for not doing enough to complement efforts by the Bank of Ghana to stabilize the ced, although the Finance Ministry has disagreed with that position.

Speaking on Business Trends on Joy FM, Professor Quartey said government needs a better strategy.

'If you look at government's policy towards addressing the energy challenges we are currently in, and a few other areas, I don't see us providing a long- term sustainable solution to the free fall of the Cedi", he said.

Professor Quartey suggested that the surest strategy is for government to groom the production base properly so the country can export more.

Analysts have warned the Cedi's challenges may worsen in the coming weeks.

"We expect further depreciation of the local currency. Over the past few weeks the Cedi depreciates on the average between 0.78 and 1.7 percent. So we are expecting another depreciation of that sort", Analyst Derrick Mensah said.

For small businesses, the cedi's decline is only aggravating the situation they find themselves in.

Meanwhile, Head of Retail Clients at Standard Chartered Bank, Henry Baye has suggested businesses take up hedging and slow down on business volumes to minimize losses.

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