The Governor of the Bank of Ghana, Dr. Ernest Addison, has claimed that the local currency, the cedi, has cumulatively depreciated against the dollar by 15.8% in 2022 alone.
And 2022 is just entering its third quarter.
Speaking at the 6th CEO Summit in Accra on Monday, 30 May 2022, Dr Addison, who by any stretch of the imagination has failed along with the economic Management team as Governor, did not speak of resigning.
Rather he flaunted ridiculous blame – claiming the woes of the cedi were mainly due to developments in global capital markets including the rating downgrade of Ghana’s economy, which are the cause of the mess.
The Ghana cedi, he said, came “under severe pressure in the first quarter of 2022 as offshore investors exited positions in domestic securities at a time when domestic demand for forex had increased”.
“The FX pressures, coupled with tight forex liquidity due to absence from the international capital markets, contributed to the significant currency depreciation”.
According to him, “To ease off increased volatility in the foreign exchange (FX) market, the Bank extended the forward auctions to include the Bulk Oil Distributing Companies”.
Dr. Ernest Addison said recent price developments mean there are elevated pressures from both domestic and external sources.
These include the global energy and food price shock, and its consequential upward adjustments on domestic ex-pump petroleum prices and transportation costs, domestic food prices, as well as the pass-through effects of the recent exchange rate depreciation.
The BoG Governor repeated the misinformation again about headline inflation, adding, “has increased sharply from 13.9 per cent in January 2022 to 23.6 per cent in April 2022, driven by both food and non-food prices”.
This claim is being challenged by experts including John Hopkins University Professor of Applied Economics, Steve Hanke, who says his calculation shows inflation in Ghana is now a whopping 45.63%.
But continuing, Dr. Addison said, “The Bank of Ghana’s inflation target is 8+/- 2 %. The current inflation of 23.6 per cent is about three times the central target of the Central Bank, and has significantly complicated the conduct of monetary policy, making those of us in charge very uncomfortable”.