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Business News Wed, 14 Oct 2020

We've slowed down depreciation - Dr Bawumia

Vice President Dr Mahamudu Bawumia, appears to be backtracking on his trumpeted promise of 'arresting' the dollar when the New Patriotic Party (NPP) is voted into power.

In the 2016 electioneering campaign, the former deputy governor of the Central Bank was vocal in his promise that the NPP government when elected into office will 'arrest' the dollar.

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

This has given cause to many, particularly functionaries of the National Democratic 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 ex-deputy governor of the Bank of Ghana, played down the accusation.

He said Ghanaians got him wrong on his pronouncement, stating "arresting the dollar does not mean that the exchange rate will be standstill but the speed of depreciation will be slowed".

The Vice President continued "it's not possible to keep the rate of depreciation 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 honoured its promise as the rate of depreciation has been lowered significantly.

According to him, apart from the era of ex-President Kufuor, no other government in the annals of the country has performed so well in the area of cedi depreciation than the current regime.

"The only regime that performed better than us is in the arena of the management of cedi depreciation is former president Kufuor's era between 2003 and 2005" the doctor in economics emphasised.

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

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

The Vice President pointed out that the feat has been achieved by prudent economic management which has restored confidence in the economy.

He stated that the introduction of forward banking in place of spot banking by the Bank of Ghana has gone a long way to control the depreciation of the cedi against the dollar.

Explaining the policy, Dr Mahamudu Bawumia, said unlike the spot banking which allowed persons to request dollars in bulk from the Central Bank on the spot, the forward banking initiative requires patrons to put in their request in advance.

This, he said, affords the Central bank to put in place measures to mitigate the shocks such withdrawals bring.

Noting that the NPP is the better manager of the economy, the Vice President encouraged Ghanaians to discredit the accusation being levelled against him by his opponents.
Source: Owusu Morgan, Contributor
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