BoG accused of “fraudulently” warping forex rates

Obuasi West Member of Parliament, Kweku Kwarten, has accused the Bank of Ghana of fraudulently manipulating the forex rate figures.

In agreement with recent concerns raised by former Deputy Governor of the Central Bank, Dr Mahamudu Bawumia, that the interbank exchange rate of Gh¢3.03: 1$ quoted by the Bank was at variance with the figure of Gh¢3.8: 1$ quoted by various commercial banks – which the Bank of Ghana regulates – the Legislator said Saturday that he suspected the Bank of Ghana was up to no good.

He accused the Central Bank of warping the figures to conceal the truth about the depreciation of the local currency – The Cedi.

The Financial Times and Reuters have been reporting a 40 percent depreciation of the Cedi against the dollar and other currencies of international trade since the beginning of 2014.

The Government of Ghana, however, recently, denied those figures.

Communications Minister Dr Edward Omane-Boamoah, in a statement, a couple of weeks ago, insisted that the Cedi had depreciated by just 22.9 percent.

At the end of August 13, 2014, the Central Bank set the average exchange rate at 3.03 cedis to a dollar while the Statistical Service said inflation, as of the end of July had risen to 15.3 percent.

Raising suspicions about the figures, Dr Bawumia wondered why there appeared to be such a wide gap between the figures quoted by officialdom and the reality on the ground.

“Where in Ghana today can you buy a dollar at close to GHC3.03? The large spread between the Bank of Ghana exchange rate and the interbank exchange rate indicates that the Bank of Ghana rate is being administratively set and not market driven," the two-time running mate to the main opposition New Patriotic Party’s presidential candidate said.

As far as the rate of inflation was concerned, Bawumia said: “The rate of increase of prices in 2014 by our collective experience is clearly the highest in recent times, underpinned by the 40% depreciation of the exchange so far this year, increases in petroleum, utility and transportation prices, etc. The prices of most goods and services have virtually doubled and continue to increase daily.

This notwithstanding, the Ghana Statistical service data on inflation suggests that price increases in 2014 are slower than they were last year (2013). Between January and July 2014 inflation increased by only 1.5% (13.8% to15.3%) after all the increases in petroleum, utilities and other prices we have witnessed," he said.

Kweku Kwarten told private FM station, Joy, that he was in good company with the former Deputy Governor.