The Finance Minister has told critics that despite the cedi’s current depreciation, it was performing better than it did around the same period in two previous years.
Ken Ofori-Atta said the cedi has made great strides towards recovery following the successful issue of the $3 billion Eurobond and the completion of the IMF review.
He told Parliament on Thursday that the depreciation of the currency was not due to weak economic fundamentals, but rather a combination of structural rigidities and apparent speculative behaviour of portfolio investors and market participants.
“It is also noteworthy that while this is a challenge, the cedi has however performed better over the past two years than when compared specifically to 2012 to 2016.”
Since January, the cedi has been losing to the major trading currencies, however, it has started making some gains.
Critics, mostly from the opposition National Democratic Congress (NDC) say cedi’s challenge is a sign the economic fundamentals are weak.
“Indeed, the cedi has appreciated by 5.12 per cent in March 2019 alone as against depreciation of 2.7 per cent in the same period last year,” he said to buttress his point that the local currency was on the path of recovery.
The Minister told Legislators that the current government have done a lot of work to “ensure that the economic fundamentals are robust and able to support economic growth and transformation.”
Mr Ofori-Atta also stated that current progress on the economy – sustained GDP growth and economic transformation – would eventually ensure that the currency was stable over the medium term.
He said the Bank of Ghana would remain vigilant in the short term to build adequate revere buffers and promote market discipline in the foreign exchange market over the medium term.
“The government will ensure that we have a transformed economy that will strengthen our trade, current and capital accounts”.