Vice President Dr. Mahamudu Bawumia has expressed his intention to adopt a new exchange rate regime that links the country’s local currency to gold.
According to him, this move aims to anchor the cedi’s position against major trading currencies, thereby enhancing the stability of the exchange rate.
Speaking at the inauguration of the Royal Ghana Gold Limited in Accra, which is the country’s first gold refinery establishment, Dr. Bawumia said his proposal will be adopted if he is given the nod in the upcoming general elections.
“I would like to propose a new foreign exchange regime management act for Ghana next year in which the value of the cedi will be anchored to gold. This will enhance exchange rate stability,” the vice president said on August 8, 2024.
The proposal by Dr. Bawumia, if adopted, will follow suit with Zimbabwe, which has backed its currency with gold.
Known as the ZIG, the adoption of the gold-backed unit has helped in overhauling Zimbabwe’s currency regime in the wake of persistent depreciation of the Zimbabwean dollar to the US dollar.
Additionally, due to growing geopolitical tensions, many African countries have instituted measures to build their gold reserves to anchor their respective exchange rate regimes.
MA/NOQ
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