Economist and Head of Research at the Institute of Economic Affairs (IEA), Dr. John Kwakye has downplayed the sustainability of the recent appreciation of the Ghana Cedi.
The economist is of the opinion that the gains made by the local currency are a deliberate move orchestrated by the Bank of Ghana (BoG) to create a facade of economic stability ahead of the 2024 General Elections.
The cedi in recent days appreciated to about 15.90 to the dollar. This happened after an aggressive intervention by the BoG in the foreign exchange market. The Central Bank in mid-November pumped US$40 million into the interbank marketing leading to the boost in the cedi’s value.
This intervention which led to some positive performance of the cedi, Dr. Kwakye describes as an orchestration to manipulate the market conditions and not rooted in improved economic fundamentals. He further alleges that this move might be an attempt to hoodwink Ghanaians in the run-up to the crucial presidential and parliamentary elections.
“Recent cedi appreciation is being deliberately orchestrated by BoG in the run-up to the election. It is not due to any improved fundamentals,” the Economist wrote in an X post.
The former Monetary Policy Committee (MPC) member of the BoG argued that the true test of the cedi’s stability would emerge after the elections, when market forces would once again take full control, potentially reversing the perceived gains.
“The real test will come after the election,” the Economist predicted.
For many Ghanaians, the cedi’s performance directly impacts their cost of living, particularly through its influence on inflation and import costs. Dr. Kwakye’s claims suggest that any short-term relief felt by citizens could be fleeting, with a potential post-election depreciation likely to erode these gains and exacerbate economic difficulties.
