The business sub-sector got some respite from the free fall of the local currency when the Bank of Ghana stabilized the currency by increasing its injection of dollars into the economy.
Learn to "Shut up" about your strategies- Dr. Mensah to BOG
Lecturer of Banking and Finance at the University of Ghana Business School has criticised the Bank of Ghana for publicly declaring the interventions they make to forestall the slide of the Cedi.
The Ghana Cedi appreciated against the dollar from GHC4 to GHC3.2 to a dollar in July. This did not last, however.
Financial analysts and economists had a lot of skepticism over the Bank of Ghana's ability to sustain the increased injection of dollars unto the market.
Speaking on Radio Univers' business analysis program, Business Trendz, Dr. Laud Mensah argued that the Bank of Ghana's intervention was a short-term measure which should not have been made public.
The discussions surrounding the Bank of Ghana's increased injection of dollars into the economy sparked more speculations about the currency and further bred more negative publicity for the performance of the currency.
Dr. Laud Mensah added that the Bank of Ghana's "loud mouth" armed speculators with more information on how to exploit the performance of the Cedi.
" All the Bank of Ghana achieved with the public announcement of their moves to increased supply of dollars was to tell speculators how low the cedi can depreciate to, and how high it could appreciate to with the help of the central bank. That is a tool for more speculation. The bank of Ghana better of making their move silently."
Meanwhile, financial analysts have predicted worst times for the Ghana Cedi for the third and fourth quarters of the year. This is owing to business activities in Q3 and Q4 of the year which include repatriation of profits and dividends by foreign companies, as well as increase in imports due to the festive season.
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