The Governor of the Bank of Ghana, Dr. Paul Acquah, says the cedi redenomination exercise was not mentioned in the 2007 budget presented to Parliament because it had the risk of sending wrong signals to the market.
He added that his outfit however had consultations with the government before the introduction of the cedi re-denomination.
The Governor said this in response to a question posed by the Minority Leader on whether government was aware of the sudden introduction of the critical monetary policy and why it was not mentioned in the 2007 budget.
In a follow up on how much it was going to cost the country to print the new notes, the Governor said he could not indicate because public education was underway and was part of the expenditure.
Briefing Parliament on the new policy, the Governor said because Parliament has oversight responsibilities for budgetary policies, Parliament's commitment to fiscal discipline would be crucial for the success of the monetary reform over the long term.
He said the re-denomination demands a continued commitment to financial stability, a dedication to preserve the values of the currency unit as a monetary standard to maintain its value in terms of quantity.
According to him, it is a commitment to implement policies and manage affairs in both the public and private sector in such a way that the value placed on the cedi remains stable.
He said that the re¬denomination will free the economy to do business in the most efficient way based on the cedi as a means of exchange and with continued commitment to prudent and disciplined economic policies.
Dr. Acquah disclosed that the new currency notes and coins were planned for introduction by July 2007 and the public would be kept fully informed about the exercise, which would require the cooperation of stakeholders and public institutions.
He noted that in this regard, Parliament would be required to soon rectify the statutes of the West African Monetary Zone and its institutions, which is one of the obligations Ghana has to fulfill along with other convergence criteria.
The Governor explained that both the old and new cedi notes and coins would be in physical circulation for a period of at least six months before the old cedi notes and coins would be withdrawn.
He cautioned that one does not need to withdraw money already in the bank for exchange because after the re-denomination, new notes would be given but after six months, old notes would be changed only at the bank of Ghana and any commercial or rural bank but would not be legal tender to be used for trade and other transactions.
After the presentation, Hon. Bagbin said members of the house needed more insight and needed to be convinced because they would not be in a position to play a crucial role as a vehicle in the educational process of such an important policy if they were not well versed in the process and requested a revisit of the Governor to the house.
"He has to come back to tell us the progress of the exercise".
Source: The Chronicle