The Deputy Ranking Member on the Economy and Development Committee in Parliament has cautioned government against relying heavily on foreign exchange interventions to stabilise the cedi, stressing that such measures are unsustainable without structural reforms.
According to Tweneboah Kodua Fokuo, the earlier appreciation of the cedi was not based on real economic improvements but on temporary factors such as global market conditions and tight government spending.
“It’s not as if someone is not wishing well for the economy but the reality is the reality, and the reality is what we are seeing now [cedi depreciation]. We said earlier that whatever was happening that we were applauding the government for the cedi gains were not anything structural in nature.
“The economy was not structurally changed. Neither had anything significantly been done to turn around the economy, to see any gains that the cedi was making. We were benefiting from happening across the world, and that was not anything that we were doing well locally that saw the cedi strengthened to that extent,” he explained in an interview on Joy FM’s Top Story on Thursday, September 4.
He stressed that the government’s approach of pumping dollars into the market without a clear framework was unsustainable.
“Interventions are supposed to be short-term. You cannot sustain the cedi by continuously releasing dollars without structure or strategy. So market forces must be allowed to work.”
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Source: myjoyonline.com
