Re-denomination could lead to inflation - Employers

Accra, May 2, GNA - Some employers on Wednesday expressed fears that the re-denomination of the cedi would lead to price increase of some commodities, especially those in unit prices below 50 pesewas, which could not be converted in the new Ghana Cedi.

According to them, since a unit price of an item currently selling at 40 pesewas, for instance, could not be converted into the new Ghana pesewa, a price increase to meet the new denomination could lead to inflation.

Reacting to these concerns at a seminar organised by the Ghana Employers' Association to educate its members on the re-denomination, Dr Benjamin Amoah, Head of Monetary Policy Analysis and Financial Stability Department of the Bank of Ghana, said demand and supply would not be affected in any way under the exercise.

He said there was the need for all Ghanaians to weigh the benefits of the exercise that would lessen the "dead weight burden" of carrying huge sums of money for easier transactions and accounting records. Dr Amoah said the exercise which would increase efficiency of bank note processing system and improve the overall quality of bank notes in circulation would also facilitate the introduction of vendor machines and car parking meters.

According to him, the Central Bank had put in security features to make it difficult for crooks to make counterfeits of the new currency. He added that the security agencies would also support them to check the menace.

Dr Amoah announced that the Bank had created a website - www.ghanacedi.gov.gh - to enable the general pubic to have easy access to the convertible rates. He said the easiest method to derive the new rates was to divide the current cedi by 10,000.

He denied that that the US dollar was used as the benchmark to derive the new currency, saying the exercise was consistent with the reforms envisaged under the West Africa Monetary Zone and its currency, the ECO convergence.

He said BOG would, on Thursday outdoor the new currency and advised the general public to critically study the features to easily determine counterfeits.

Dr Amoah reminded the general public that although the new Ghana cedi would be the only accepted currency from next year, changing of the old currency would have no deadline.

Banks, he said, were expected to issue out new cheque books bearing the new Ghana Cedi sign to customers and urged those without bank accounts to take advantage of the exercise to open accounts to make the exchange more convenient. 2 May 07