FLASHBACK: BoG not responsible for cedi depreciation – Bokpin

An Economist, Prof. Godfred Bokpin, said the Bank of Ghana must not be blamed for the cedi's depreciation.

He said: “Whilst the depreciation of the cedi often times our minds go to Bank of Ghana; is not Bank of Ghana’s fault largely because fiscal policy has become the main source of macroeconomic instability, thus undermining the effectiveness of monetary policy – even under the monetary policy, even under inflation targeting.”

Read the full story originally published on April 4, 2022, by GhanaWeb

Economist and Finance Lecturer, Professor Godfred Bokpin has stated that the Bank of Ghana is not the reason for the recent cedi’s depreciation against the dollar.

He said managers of the fiscal policy must take responsibility and do more to ensure that the economy bounces back.

He was speaking at a recent round table forum organized by the Institute of Economic Affairs, Professor Bokpin.

“Whilst the depreciation of the cedi often times our minds go to Bank of Ghana; is not Bank of Ghana’s fault largely because fiscal policy has become the main source of macroeconomic instability, thus undermining the effectiveness of monetary policy – even under the monetary policy, even under inflation targeting”.

“To that extent, what we are doing is more or less pursuing monetary policy as a subordinate to fiscal policy rather than it being complementary. And my own addition to the recent measures as an alternative to going to the IMF, call that one natural medicine”, he added.

Prof. Bokpin says Ghana should develop a progressive tax system that will help resolve the country’s financial problems.

“We expect that given the effect of COVID-19, the country post-COVID-19 economic reform must embrace a tax structure that is equitable and progressive and the reason the E-Levy must not be supported is that it is regressive”.

Meanwhile, a Bloomberg report has indicated that Ghana’s cedi recorded an 18.21% rate of depreciation to the US dollar in the first quarter of 2022.

It ranked the cedi as the worst among African currencies with the “Worst Spot Returns”.

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