So the Cedi is depreciating and NDC is accusing the Vice President and NPP of lying to Ghanaians.
Some of the key determinants of exchage rate volatility are inflation, interest rate differentials, trade balances among others.
Since the NPP government assumed office in January, 2017 the competent economic management team has worked to reduce inflation, interest rate and trade deficit far better than the NDC.
Under erstwhile NDC government interest rate was 36%, assuming interest rate of U.S.A is 3% it means the Cedi has to depreciate by 33% to attain parity with the U.S dollar.
However, under NPP, interest rate has reduced to 25% which also means the Cedi has to depreciate by 22% to attain parity with the U.S dollar.
The government is dealing with trade deficits through the implementation of 1D1F to reduce importation of certain goods.
We shouldn’t forget the ban on small scale mining aimed at protecting the environment has denied the state some $3billion which could have increased the dollar supply.
That is why the Cedi is depreciating under NPP, but at a lower rate compared to NDC.
Correcting the depreciation require fixing our import dependency, increasing export, bridging the interest rate differential gap coupled with other measures.
Fellow patriot, NPP is far better than NDC so let us be proud of the economic management team. The Cedi will depreciate but at a lower rate to a point where it will normalize.
Greetings to Alhaji Short
Ahanta Patriot
Asempa Ye Short
Abraham
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