Steve Hanke finally speaks after Cedi gain; says it fell by 31.17% against the USD since Jan

A Johns Hopkins Professor Steve Hanke has said that by his calculations, the Ghanaian Cedi has depreciated 31.17% against the United States Dollar since January 2022.

To that end, he placed the local currency in 14th place in this week’s ‘Hanke’s Currency Watchlist.’

“Thanks to President Akufo-Addo, Ghana is in an economic death spiral,” he tweeted on Tuesday evening.

He previously placed Cedi 15th among a list of nineteen performing currencies.

“By my calculations, the Ghanaian Cedi has depreciated 34.17% against the USD since Jan. 2020, which is why Ghana is in 15th place in this week’s Hanke’s #Currency Watchlist,” one of his earlier tweets said.

“To save the cedi,” he said, “Ghana must mothball its central bank and install a #CurrencyBoard.”

The Cedi has over the past few days, especially since the start of December 2022, been gaining strength against the major trading currencies particularly, the Dollar.

Per the Bank of Ghana (BoG) rate, the Cedi, as of Monday December 19, was buying at GHS7.9970 to a Dollar and and selling at GHS8.0050 to a Dollar.

President Nana Addo Dankwa Akufo-Addo indicated that the Cedi’s appreciation against the US Dollar is as a result of the measures taken by his government in partnership with the central bank, the Bank of Ghana (BoG).

Mr Akufo-Addo said the appreciation did not happen by chance.

Speaking at the centenary celebration of the Ga presbytery of the Presbyterian Church of Ghana in Accra on Sunday December 18, he said “At the height of our challenges there were some who doubted the capabilities of my government and I to return our nation back onto the path of progress and and prosperity and lift us out of our current problems. In those dark moments, my fellow Ghanaians and and congregation, I could only recount the words of the St Matthew chapter 19 vrs 26 which states ‘But Jesus looked at them and said to them, with men this is impossible but with God all things are possible.”

He added “With the appropriate policy, determination and hard work on our part things are beginning to turn around. What seemed impossible yesterday is now becoming possible. We are definitely not yet out of the woods. However, today, the Cedi is rapidly appreciating against the US Dollar and all major currencies, making up for its losses and the prices of petroleum products are reducing at the pump.

“The strengthening of the Cedi has not happened by chance but through the implementation of deliberate policies by government in collaboration with the Bank of Ghana. These include Cedi liquidity tightening measures resulting in the offloading of forex as stalled value by speculators, the improvement of forex inflows from remittances and the mining sector and the reaching of the staff level agreement with the IMF for a 3 billion US Dollar package. All these have combined to bring the Cedi to this position and I can assure you that government will continue to work hard to maintain and sustain the gains made.

“Indeed, in the weeks ahead, the BoG will continue with the purchases of forex from the mining and oil sectors to enhance liquidity supply to the markets, continue with single unified forex forward auction and some modest targeted bilateral support to critical import.”