We have slowed down depreciation – Dr. Bawumia

Business news for Wednesday, October 14, 2020

Source: Owusu Morgan, Contributor

2020-10-14

Vice President Dr. Mahamudu Bawumia appears to be backtracking on his proclaimed promise to “arrest” the dollar when the New Patriotic Party (NPP) is voted into power.

In the 2016 election campaign, the former deputy governor of the Central Bank expressed his promise that the PNP government, when elected to office, will “arrest” the dollar.

At that time, the exchange rate of the cedi to the dollar was Gh ¢ 4.2, but despite the much discussed promise, the exchange rate is now Gh ¢ 5.78.

This has prompted many, particularly officials in the Democratic National Congress (NDC), to accuse the vice president of eating a humble pie on his promise.

But speaking in an interview with Pure FM in Kumasi on Wednesday morning, the former deputy governor of the Bank of Ghana played down the allegation.

He said the Ghanaians were wrong in their pronouncement, stating that “stopping the dollar does not mean that the exchange rate will stop, but the speed of depreciation will slow.”

The vice president continued “it is not possible to maintain the depreciation rate at one point but you can manage the rate at which it depreciates and that is what I meant.”

On that, he indicated that the government has fulfilled its promise since the depreciation rate has been significantly reduced.

According to him, apart from the era of former President Kufuor, no other government in the annals of the country has performed as well in the area of ​​depreciating the cedi as the current regime.

“The only regime that performed better than us is in the area of ​​managing the depreciation of the cedi is the era of former President Kufuor between 2003 and 2005,” emphasized the doctor in economics.

He revealed that, unlike the time of former President John Dramani Mahama, when the cedi depreciated against the dollar was 18 percent, its depreciation rate has been hovering around eight (8) percent.

“This year, despite the domino effects of Covid-19, the depreciation of the cedi against the dollar is as low as two (2) percent,” revealed Dr. Alhaji Bawumia.

The vice president noted that the feat has been achieved through prudent economic management that has restored confidence in the economy.

He stated that the introduction of forward banking instead of spot banking by the Bank of Ghana has greatly contributed to controlling the depreciation of the cedi against the dollar.

Explaining the policy, Dr Mahamudu Bawumia said that unlike spot banking which allowed people to request bulk dollars from the Central Bank on the spot, the forward banking initiative requires clients to apply. in advance.

This, he said, allows the Central Bank to implement measures to mitigate the shocks that such withdrawals bring with them.

Noting that the PNP is the best manager of the economy, the vice president encouraged Ghanaians to discredit the accusation that their opponents had made against him.