Pounds, Euros Also Struggling Against The Dollar
The Spokesperson for the Vice President, Dr. Gideon Boako, has said that Ghanaians must take into consideration the depreciation of other major currencies against the dollar when assessing the depreciating Cedi.
In an interview on Citi TV, Dr Boako was of the view that the 'magnitude of depreciation is not huge.'
'You may think that because Ghana Cedi is depreciating it's not good. But given the same conditions, the global contagion and all that, look at the depreciation in other countries. I am not saying that is the argument we should do, but it's important to know that the Euro and the pounds are all depreciating against the dollar. The Argentinian peso is depreciating by 50 percent. I am giving you this context for you to understand that it is not necessarily the Cedi that has its value going down.'
The Cedi is trading at almost GHc5 to the dollar. However, Dr. Boako said the country is still seeing 'a slower rate of depreciation.'
The cedi cumulatively depreciated by 26.12 percent in 2017.
Between January and June of the same year, the local currency depreciated by 7.75 percent.
However, for the same period this year, the cedi depreciated by 1.59 percent.
Dr. Boako said the NPP government has built strong economic fundamentals, unlike the Mahama administration during their tenure.
'If your rate of depreciation is higher than your rate of inflation, it means your fundamentals are absolutely weak. If you are able to achieve a rate of depreciation that is lower than your inflation, then it means your fundamentals are supporting. As at the time, we were having an inflation rate of less than 30%, and still, we were depreciating by 31%. You can't have a strong fundamental and at the same time, have an exchange rate depreciation that's higher than your rate of inflation.'