Stability in value of cedi primarily the role of the Central Bank – Ken Ofori-Atta
Finance Minister Ken Ofori-Atta has said that the stability of the cedi – although the collaborative duty of the Finance Ministry and Central Bank – per functions outlined in the BoG Act, 2022 is primarily the duty of the Central Bank and for that matter the Governor to maintain stability in the value of the cedi.
He made the assertion in response to the third ground for the censure motion claiming fiscal recklessness on his part as the Finance Minister leading to the crash of the cedi which is currently the worst performing currency in the world.
Responding to the claim, the Minister said, “the idea that the depreciation of the Cedi is the result of fiscal recklessness is not supported by the available facts. The Ghana Cedi consistently performed very well throughout my tenure as Finance Minister, up until March 2022. The records show that between 2012 and 2016, the Cedi depreciated by an average of 17% whilst between 2017 and 2021, the average rate of depreciation was 7%.
“The major contributors to the currency problem are not necessarily fiscal factors Hon. Co-Chairs, unlike July 2014 when the Cedi was last rated as the world’s worst performing currency, the 2022 depreciation is largely attributed to extraordinary global factors including the strengthening of the US Dollar (even against major international currencies like the UK Pound and the Euro); and speculation due to economic uncertainties. For example, in this year, 2022, the Euro is worth less than the dollar for the first time in 20 years.
“As stipulated in Article 183 of the Constitution, Section 2(a). The Bank of Ghana shall promote and maintain the stability of the currency of Ghana and direct and regulate the currency system in the interest of the economic progress of Ghana. As such, the Bank of Ghana, which manages our reserves is leading the interventions to contain the depreciation of the Cedi.”
Meanwhile, the eight-member Adhoc Committee constituted by Speaker Alban Bagbin to assess the vote of censure against the Minister for Finance, Ken Ofori-Atta, has said the Governor of the Central Bank would be brought before Parliament to answer questions pertaining to the fast depreciation of the local currency (cedi).
The year-to-date depreciation of the cedi against a strengthening dollar has been pegged at 52% with the cedi currently going for GHS 14.50 to $1.
