Vice President Dr Mahamudu Bawumia in an exclusive interview with Peace FM's morning show 'Kokrokoo' said arresting the cedi, "doesn’t mean we are going to lock it at one rate but essentially lock it within the range of the fundamentals such that the lower inflation rate will produce lower depreciation".
“We are running a flexible exchange rate regime; we don’t do fixed exchange rate regime. So, the exchange rate moves according to the market forces but fundamentally, the exchange rate is going to be determined by your inflation rate,” he said.
He pointed out that, “our currency, under the NDC, when they came to power, was $1 to GH¢1 but by the time they left office, they had taken it to $1 to GH¢4. So, it was a quadrupling of the nominal rate if we came to power, if we had also quadrupled it, we would have had $1 to GHS16 . . . but we are at almost GH¢6 today.”
“But when you talk about depreciating at an exchange rate of 8 percent on average and you’re having inflation around that amount . . . you have really performed well because the exchange rate is consistent with the fundamentals,” Dr Bawumia added.
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