Renowned economist and professor at the University of Ghana Business School, Professor Patrick Asuming, has dismissed suggestions that the recent appreciation of the Ghanaian cedi is artificial.
Speaking to Joy Business, Professor Asuming emphasized that the recent gains recorded by the local currency are underpinned by both internal and external economic fundamentals.
He pointed to strengthened gross international reserves and strategic policies such as the gold-for-oil programme and efforts to regulate gold trading as critical drivers of the cedi’s performance.
“I wouldn’t say it’s too artificial. I think some of the fundamentals have changed,” he noted, adding that the ongoing improvement in foreign reserves and commodity-based interventions have potential long-term benefits for currency stability.
While acknowledging the rapid appreciation of the cedi within a short period, Professor Asuming expressed caution about the pace of the currency’s rise.
He warned that allowing such quick gains without pressure from the demand side might necessitate a market correction.
He called for targeted measures to ensure that the cedi’s current strength is sustained in the medium to long term, urging policymakers to prioritize maintaining the underlying fundamentals that support the currency’s value.
His remarks come amidst a broader debate over the sustainability of the cedi’s recent performance, with concerns from some market watchers that the gains could be short-lived if not supported by lasting structural reforms.
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