Policy interventions driving cedi gains – Analyst
By: Rebecca Okine
Financial analyst Sylvester Asare says the recent recovery of the Ghanaian cedi is the result of deliberate and strategic policy interventions aimed at strengthening the local currency.
Speaking on Zed FM’s current affairs programme The FOCUS on Saturday, Mr. Asare highlighted both historical reforms and current monetary strategies as key drivers of the cedi’s resilience.
He pointed to the redenomination exercise as a foundational move that helped restore the cedi’s functionality and value.
“We took off the zeros to make the cedi easier to carry and more effective as a medium of exchange,” he said.
Mr. Asare further explained how targeted financial instruments, such as long-term bonds, encouraged greater investment in the local currency over foreign alternatives.
“When a four-year bond with a 42% return was introduced while Treasury bill rates hovered around 24%, people opted for the cedi instead of the dollar,” he noted. “This reduced demand for foreign exchange and helped the cedi rebound,” he noted.
However, he cautioned that the recent gains could be short-lived if not properly managed.
“For the recovery to be sustainable, bond proceeds must go into productive investments, not short-term consumption,” he warned. Mr. Asare urged policymakers to maintain fiscal discipline and focus on long-term growth strategies to safeguard the cedi’s progress.
