The gains made by the Ghanaian cedi against other major foreign currencies in the past weeks are not sustainable, economist John Gatsi has stated.
Currently US$1 sells for GHS 4.3 on the interbank market.
Dr Gatsi said the action of the Bank of Ghana (BoG) to pump some US$120 million into circulation within the short term to prop up the currency could “be yielding some fruits, but we do not expect that this would last because the cedi itself is a depreciating currency and will continue to go through that cycle”.
For him, the country has not worked towards keeping the cedi more predictable within a stable zone so “this (appreciation) is just one of the cycles being repeated”.
According to him, the country must find “medium to long term solutions to addressing the fluctuation of the cedi which should be the focus of the managers of the economy”.
He suggested the moderation of imported goods, diversification of export base and export destination to more effectively arrest the cedi’s slide. He was very concerned about expansion of production, adding that “these are the things that we need to strategise so that it brings benefits to the country in the medium to long term”.
He said the government of Ghana must provide incentives which will motivate people to alter their consumption patterns and reduce the taste for imported foreign goods.
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