Patrick Asuming, an economist and lecturer at the University of Ghana, has called for calm in the face of the Ghana cedi’s recent decline, arguing that despite recent losses versus major international currencies, the currency is still comparatively stable.
Prof. Asuming stated that the devaluation of the cedi has so far been within a tolerable range while speaking on Joy FM’s Super Morning Show on Monday, May 25, in response to a recent Reuters story on currency movements.
“So far, we haven’t seen the wide range when we study the system. The Central Bank has been able to moderate swings. I think it is generally kept at a low level, and on that note, I don’t think we should start raising alarms,” he said.
He explained that worries should only surface when there is persistent pressure on the currency and it depreciates sharply and repeatedly over a little period of time.
“If we begin to see so much pressure on the currency that, within a two-week period, we experience massive losses, then you begin to worry because that is when things get out of control,” he said.
Prof. Asuming emphasised that rather than being viewed as isolated occurrences, exchange rate swings should be evaluated within the larger macroeconomic context because they are typical in any economy.
Source: newsthemegh.com