By John Gumah Amanor
An Economist and Senior lecturer at the University of Ghana Business School, Dr. Patrick Assuming, believes that the gain of the Cedi against the Dollar is due to progress being made on the IMF negotiations.
According to Dr. Patrick Assuming, the debt restructuring program announced by Government accounts for the progress. He said not just that the debt restructuring program will lead to successful IMF bailout but will also improve the performance of the Cedi against the Dollar.
Dr. Assuming also expressed confidence that when the deal is agreed upon, it will bring in some additional dollar inflows and unlock additional foreign currency inflows from bilateral and multilateral countries. This, he said, will help stabilise the micro-economy further.
Dr. Patrick Assuming attributes the Cedi’s depreciation to circulating activities, which he said appear to have come down, and this amounts to the Cedi’s performance.
“Circulators were predicting Cedi depreciation, causing many to store dollars, and that raised the demand,” he said on GBC’s Uniiq Breakfast Drive.
Dr. Patrick Assuming said inspite of the gain, there is still some undervaluation in the current Dollar-Cedi rate. Doctor Patrick Assuming mentioned that the structure of the Ghanaian economy, that makes it too dependent on importation and foreign financing, makes it prone to shock anytime there is a global economic crisis.
“The structure of the Ghanaian economy that makes it too dependent on imported goods and on foreign financing,” he said.
“What it does is that anytime there is a shake in the global economic environment it straight away translates to the Ghanaian economy.”
Ghana has over the past few months been experiencing currency depreciation against major trading currencies, especially the US dollar.
