A lecturer in the Department of Finance at the University of Ghana Business School, Dr. Benjamin Amoah asserts that the constant depreciation of the cedi stems from weaknesses in the economy's fundamentals.
According to him, certain factors including inflation, unemployment, and interest rates have risen, and the government inability to control them has resulted in the free fall.
Speaking on Joy FM’s Top Story on May 14, he said “The fundamentals are definitely weak. We should not play jokes about it. The truth is that the fundamentals are very weak. What is the fundamental here? What is the inflation rate as we speak now and what is has been the inflation rate over time, very high. What is interest rate, that is the fundamental factor, it is very high."
“What is unemployment rate now? Unemployment rate is very high. What is our balance of payment position, it is very high and these are the very fundamentals that is used in accessing the exchange rate.”
He explained that addressing just one of the indicators does not resolve the depreciation of the cedi; rather, it requires effective management of each of these factors.
The cedi was trading against the dollar at GH₵ 11.98 but now hovering around GH₵ 14.80 at the forex bureaus resulting in a depreciation rate of close to 20% since the beginning of the year
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