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How long can $2 billion “pumped” into the economy keep the cedi from losing value? – John Kwakye asks govt

Dr. John Kwakye, the director of research at the Institute of Economic Research (IEA), has questioned how long the $2 billion the government plans to invest in the economy can prevent the local currency, the cedi, from declining further.

He asserts that bringing in additional dollars can support the cedi but that much more work must be done to stop future devaluation.

In his opinion, the economy will eventually continue to sway until the structural issues with the economy are resolved.

Speaking on TV3’s Ghana Tonight show on Tuesday, August 23, Dr Kwakye said, “The $ 2 billion can make a difference but for how long? Unless you address the structural problems, the fact that we don’t earn foreign exchange on our own…Until we address the underlying structural problem, we can stabilise the Cedi for a while but for how long.”

Recall that on August 23, 2022, Kojo Oppong-Nkrumah, the information minister, declared that the government planned to pump $2 billion into the economy.

According to Kojo Oppong-Nkrumah, the Bank of Ghana will get the 750 million dollars expected from Afremix Bank this week, along with an additional $1.3 billion from the syndicated loan for cocoa.

Since the beginning of this year, the cedi has consistently declined in value versus major trading currencies, particularly the US dollar.

The cedi had lost more than 20% of its value as of July 2022.

On the exchange rate market, the local currency is currently trading for more than GH10.00 to one US dollar.

Disclaimer: The opinions expressed in this publication do not in anyway reflect the opinions of State News Ghana

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