Currency put in circulation increased by 152.7m cedis between January and December 1994, up 63.7 per cent on the previous year and therefore bringing the currency in circulation to 392.2 Billion cedis.
According to financial analysts this is a gross distortion in the country's monetary policy. Of this amount, 368.8 billion cedis is with the non-bank public while a mere 23.3 billion cedis are with the banking sector including the discount houses.
According to the quarterly economic bulletin of the Bank of Ghana, currency in circulation showed a substantial increase of 120 billion cedis compounded with an increase of 11.7 billion cedis in the previous quarter.
The bulletin stated that the Central Bank will continue to rely on open market operations to mop up excess liquidity and thereby restrain inflationary pressures and encourage savings mobilisation. It said prices of goods and services continued to rise during the quarter mainly as a result of excess liquidity, coupled with lower than expected food production.
