“The cedi’s stability is influenced more by domestic factors than external ones” – First Deputy Governor of the BoG

The First Deputy Governor of the Bank of Ghana, Dr. Zakari Mumuni, has credited the remarkable appreciation of the Ghanaian cedi to strong domestic economic policies.

According to him internal factors have played a greater role than external ones in stabilizing the local currency. In an interview on JoyNews monitored by Elvisanokyenews.net, Dr. Mumuni revealed that the cedi has appreciated by 12.2% since the beginning of the year, a development he discribes as a sharp reversal from the same period last year, when it depreciated by about 13%.

“The cedi as you know has had this good run. We’ve had the cedi appreciating by over 12%, specifically 12.2% appreciation from the beginning of the year to now. The same time last year we had depreciated by about 13% so this is a complete reversal of what the situation was last year.

“Indeed this is maybe unprecedented  because if you look at the data from when we started you know the floating rate regime, the flexible exchange rate regime up to now this is the only time within the first four or even five months that we have had this level of strength in the Ghana Cedi.” He stated.

The Deputy Governor further disclosed that while external factors such as improved global investor sentiment have had some influence, domestic policies are the main drivers of the currency’s impressive performance.

He furthe disclosed that the Bank’s firm policy stance, including interest rate adjustments, has played a critical role in restoring market confidence and strengthening the currency.

“Well you will see the drivers are broad based and rightly so as I have been mentioned in many circles, you have the domestic factors playing a role. You also have some part of it coming from the external environment but the domestic factors really have  more weight in this case than the external factors.

“It just simply reflects the careful mix of policies that are being implemented. First we can talk of the monetary policy stance. I’m sure when we raise the policy rate a lot of people including GUTA came after us they had all kinds of comments and even analysts as well they were not happy about that but we knew  exactly what we were doing and the fruits you are beginning to see, so we lifted or tightened monetary policy for one reason to make sure we re-engineer the disinflation process.” He stated

Source: Elvisanokyenews.net