Bank of Ghana clueless about the economy - Casely- Hayford

daniel russell

August 8, 2015 1:20 PM

In July 2015, the Bank of Ghana decided to increase its dollar ingestion from $14 million a week to $20 million dollars a day to stem the slide of the cedi.

Casely-Hayford - Financial Analyst

Financial analyst and ranking member of civil society organisation, Occupy Ghana, Sydney Casely- Hayford says the current downward slide of the cedi vindicates the skeptics who said the Bank of Ghana could not keep up a daily ingestion of 20 million dollars into the economy as a swift measure to stabilize the currency.

Speaking on Citi Fm’s Big Issues, the financial analyst said, the economy did not benefit in any way, from the temporary appreciation of the cedi, because even though the cedi appreciated against the major currency, prices of commodities did not change.

“ We did not benefit in anyway. Even though the cedi appreciated, the prices of strategic commodities like fuel did not decrease at the pump”

Sydney Casely- Hayford further criticized the Bank of Ghana’s handling of the performance of the currency.

“They do not understand the Ghanaian economy. If the Bank of Ghana understood this economy, and knew what to do, they would fix this problem. They don’t understand it. And because they don’t understand it they are doing knee- jerk reactions.”

When asked about the prospect of the $1.8 billion syndicated loan further stabilizing the Ghana Cedi, the financial analysts said it will be wrong for government to use the cocoa loan to stabilize the currency.

“Let me make it clear, the $1.8 billion cocoa syndicated loan must not be used to stabilize the currency. It will be wrong to do that. The loan is to pay cocoa farmers and export the cocoa. It is not supposed to be used to stabilize the cedi. Doing that is a lazy way of dealing with this problem. For the $1.5 billion Euro-bond, all I can say is, you cannot borrow your way out of debt.”

The Bank of Ghana has been banking its hopes on a planned $1.5 billion Euro-bond and a $1.8 billion dollar cocoa syndicated loan in order to increase dollar inflows and thereby stabilize the local currency.

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daniel russell