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Gov’t pleads for positive cedi speculation after IMF exit

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Adnan Adams Mohammed

Government actors are calling on key stakeholders of the financial market and the economy to always proclaim positive speculation around the cedi as it has begun to appreciate against the dollar after months of free fall.

The finance minister believes that, the depreciation of the Ghanaian currency was not due to weak economic fundamentals, but rather a combination of structural rigidities and apparent speculative behaviour of portfolio investors and market participants.

Mr, Ken Ofori-Atta explained that, the cedi suffered some turbulence despite the strong economic fundamentals and improvement in the country’s balance of payments, which the government achieved in the last two years.

“We have done a lot of work to ensure that the economic fundamentals are robust and able to support economic growth and transformation” he said.

He cited statistics which evidenced that Inflation declined from 15.4 percent in 2016 to 9.4 percent in 2018, Fiscal deficit falling from 6.5 percent to 3.9 percent in 2018, Interest rate on 91-day Treasury bill from 16.3 percent in 2016 to 14.6 percent in 2018 and Current Account deficit from 6.6 percent in 2016 to 3.2 percent in 2018.

However, in a plea on the floor of Parliament, the Information Minister, Kojo Oppong-Nkrumah urged more focus on the positives of the economy “so that our currency will continue to enjoy the resilience that it is beginning to experience from today.”

The minister has in the past accused the Minority in Parliament of speculating negatively about the cedi to spark panic.

“There is a practice in this country where some people specialize in speculating down the Ghana cedi for us all and the activities of speculators and the speculation that is incessantly associated with the currency contributes to this exercise. Mr. Speaker, today, in the name of Ghana, we would like to plead with such persons that as we come out of this ‘IMF programme’ and the currency begins to experience a rebound, let us speculate the positives”, he said in parliament last week.

Mr. Oppong-Nkrumah also espoused confidence in the Akufo-Addo administration to be fiscally disciplined as it exits the International Monetary Fund (IMF) programme on April 2.

The Executive Board of the IMF just approved the final disbursement of about US$185.2 million to Ghana.

“We have shown a commitment, the competence and the discipline required to meet the target and come out of that programme,” Mr. Oppong-Nkrumah said.

“We have also put in place the infrastructure for irreversibility, he added, referencing the Fiscal Responsibility Act.

“It is key in ensuring that tomorrow, we don’t run this economy aground and go back for another bailout programme.”

The minority, however, continued its skepticism of the Cedi’s recent rebound.

The Ketu MP, Fifi Kwetey said “this temporary injection that has taken place is basically going to have the same effect [as last year]. They did that, thinking that somehow that is going to lure the people into a certain sense of security but that security will be short-lived.”

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