Cedi fall: “Panic” BoG forex control measures will fail – Pianim

Economist Kwame Pianim says the interventions announced by the Central Bank toward shoring up the local currency won’t work.

The Bank of Ghana announced a string of forex control measures towards saving the cedi from falling further against the dollar.

It has also injected about 100 million dollars into the forex market to strengthen the Cedi against major international currencies.

The cedi has lost about 12 percent in value since January.

Speaking at a roundtable on Tuesday, Mr Pianim described the Bank’s interventions as a blip and said the measures will fail.

“…In the final analysis, the Bank of Ghana measures will simply be a blip. It was a panic and it will not work,” Mr Pianim predicted.

According to him, “we’ve seen it before. Administrative controls, regulations have never worked in Ghana”.

He warned that the measures will rather have adverse consequences on the economy in the long run.

“…It will not work. We’ll go back to the current market, to the black market and foreign exchange, and investors may not be coming, exporters will keep part of their foreign exchange outside and all of us Ghanaians will keep our working balances in London or in New York, when we get there we sign a cheque. We are not going to bring the cedis here. So you’ve dealt with the stock problem [but] the flow problem you haven’t dealt with. The foreign exchange that will be flowing will not come because of these measures but the stock ones, you can eat it but nothing is coming again”, Mr Pianim explained at a Citi FM roundtable.