Stabilizing cedi at GH₵10–12 right approach – Prof Bokpin

Professor Godfred Bokpin is an economist at the University of Ghana. He believes stabilizing the cedi between GH₵10 and GH₵12 is the right approach for Ghana's economy.

He stated that the Bank of Ghana aims to manage the exchange rate effectively. Speaking on JOY FM’s morning show, he explained that this goal was not new. The central bank had a plan but did not communicate it initially.

Prof Bokpin noted that recent currency strengthening was not solely due to market forces. There were interventions that contributed to this change. He mentioned that aggressive facilitation rates disrupted economic planning.

This disruption made it hard for businesses to adapt and plan ahead. He emphasized the need for stability over fluctuations in currency value. Stability is crucial for both businesses and central banking.

He acknowledged that economic stability does not mean fixed prices over time. Some variation in rates is expected, but it should be manageable. Significant disruptions can create uncertainty in planning.

In related news, President John Dramani Mahama commented on the cedi's value. He stated that a rate of GHS 4 to $1 is unrealistic. After discussions with the Bank of Ghana Governor and Finance Minister, they agreed on a more realistic range.

Mahama believes the cedi should stabilize between GH₵10 and GH₵12. This range better supports Ghana's exporters while reflecting the currency's actual worth.