Pessimists awaiting the recent impressive gains in the cedi to take a nosedive are advised to rethink, as an economist at the Institute of Economic Affairs (IEA), Dr. John Kwakye, insists the local currency’s rise is not a whirlwind.
The bullish performance, he says, is not an accident or fleeting relief, but rather the product of deliberate and far-reaching policy measures.
Dr. John Kwakye is, therefore, warning currency speculators and skeptics that the meteoric rise in the cedi is both real and sustainable, and therefore betting against it is at their peril.
The Director of Research at the IEA maintains that the development is anchored in a strategic blend of domestic economic policies bolstered by favourable external factors.
He mentions that sustained fiscal discipline, tight monetary policy, the Gold Purchase Program, high remittance inflows, strong FX regulation, among others, have given the cedi a strong footing, hence dismissing the claims of what he describes as naysayers.
He therefore warned currency speculators who have planned based on an anticipated fall of the cedi to urgently embark on a turnaround.
“Recent cedi appreciation is not “accidental” or “a passing wind” as the doubters and naysayers would want us to believe. It’s the result of a cluster of factors, many of which are calculated and enduring. Speculators must, therefore, be ware!,” Dr. Kwakye wrote in an X post.
He continued that the appreciation is the result of a cluster of factors, many of which are calculated and enduring: fiscal discipline; tight monetary policy; Gold Purchase Program; GoldBod policy; high remittances; strong FX market regulation; and improved confidence in the economy.”
His remarks come at a time when some market players have expressed doubts about the sustainability of the cedi’s rebound, often citing Ghana’s past economic volatility. Businesses have adopted a ‘wait and see approach’ and hence have failed to reduce prices to reflect the cedi’s gains.
Already, GUTA, AGI, and the Ministry of Trade, Industry, and Agribusiness have reached an agreement offering the business community 60 days for the gains to reflect in prices.
Despite the economist’s conviction that the recent performance of the cedi is here to stay, think tanks such as CPS and CERPA, including analysts such as Dr. Richmond Atuahene, have proposed various recommendations to the government to ensure the long-term sustainability of the currency.
