Cedi-Dollar Exchange Rate Stability More Crucial Than Local Currency’s Nominal Value, Says Prof. Baah-Boateng
The Vice Chancellor of the Methodist University of Ghana and economist, Professor William Baah-Boateng, has stressed that maintaining a stable exchange rate is more important for economic performance than the headline value of the cedi relative to the US dollar.
He made the remarks at a Roundtable Discussion hosted by Channel One TV on the theme “John Mahama 2.0: A Thematic Assessment of Year One” on Tuesday, January 13, 2026, where he noted that discussions around the exchange rate in the public space tend to concentrate on the numerical level of the currency rather than the extent of its fluctuations.
“Everybody is talking about the exchange rate and its volatility. We are always quick to say that the exchange rate is too high; it is 14, it is 11, or it is 10. In economic analysis, the level of the exchange rate is not the most important thing; the most important thing is the fluctuation,” he said.
Professor Baah-Boateng explained that although the cedi is currently exchanging at about GH¢10 to one US dollar, examining past trends provides a more balanced understanding of the currency’s position.
“Currently, the exchange rate is about GH¢10.00 to $1. But if you go back and you add four zeros, then you are getting GH¢4,000 to $1,” he stated, pointing to the importance of placing current figures within historical context.
He further referenced Ghana’s recent macroeconomic difficulties, particularly the sharp spike in inflation in the period following the COVID-19 pandemic.
“Over the past few years, after COVID, inflation went up to 54 per cent before coming down,” the economist observed.
Looking at earlier periods, Professor Baah-Boateng noted that movements in the exchange rate were comparatively more contained.
“From January 2016, there was a fluctuation, but it was not very much,” he said.
According to him, both rapid appreciation and steep depreciation of the currency pose risks to economic management and reduce investor confidence.
“So, the appreciation or depreciation of the currency is not very good for any economy, but the stability or the momentum of the rate is the most important for the economy,” he explained.
Beyond currency issues, the Vice Chancellor raised concerns about the country’s growth path, describing it as uneven and unpredictable.
“We have also had erratic growth. We have not been able to have consistent growth. If you look at it from 2022 Q1 to 2025 Q3, we move up and come down. If we have this kind of instability, it is not good for any economy,” he noted.
He concluded that lasting economic progress depends on sustained stability, both in exchange rate management and in growth performance, which are critical for attracting investment, supporting long-term development, and strengthening economic resilience.
