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11.05.2007 General News

Re-denomination will not affect prices


Dr. Benjamin Amoah, Head of the Monetary Policy and Financial Stability Department of the Bank of Ghana has asked the public to dispel any speculation that the redenomination of the cedi would lead to high prices.

He said contrary to such beliefs the exercise would not affect prices as market forces of demand and supply would continue to determine prices of goods and services.

Dr Amoah was speaking at a forum organized by the Ghana Shippers Council to educate members on how the changes could impact on their business operations.

According to him, the redenomination only seeks to facilitate business operations through the reduction of the amount of cash that businessmen needed to carry around for transactions.

Besides it would also reduce the strain on the payment system, especially the Automated Teller Machines, which currently needed to be filled with load of cash everyday to meet customers' demands.

Dr Amoah said since the new currency would be in circulation alongside the present one for six months, there would be no need for people to rush to exchange their monies.

He also addressed public concerns about the joint circulation of existing and the new Ghana cedi for a period of six months, saying it was feasible to do so to enable the people understand the conversion.

On the foreign exchange, Dr Amoah said the rates would be displayed as done in the international market.

He cautioned the public not to engage middlemen when exchanging their currencies.

Dr Amoah said absolute security features had been built into the new currency to forestall counterfeiting.

Mr Kofi Mbiah, Chief Executive of the Ghana Shippers' Council, said although a good number of people within the business community were aware of the redenomination exercise, they were however yet to come to terms with impact of the change on their businesses.

It was therefore imperative that the businessmen understood the redenomination exercise and how it affected their profits.

The forum was held on the topic: "The Re-denomination of the cedi and the effect on International Business Transactions."

Source: GNA