Cedi depreciated by 19.1% to dollar in January 2023 – BoG

and 20.7 per cent in value respectively in January 2023.

The local currency came under severe pressure to the American currency in January 2023 after recording some sustained stability in the greater part of December 2022. This was after Ghana reached a second of which was brutal – he had managed to bring in ation down to 3.8%. Though expectations stabilized, in ation remained elevated, although stable, for years, averaging almost 4% in 1983-90. growth, and the UK economy has shrunk by 0.8%. This year, the OECD expects US and eurozone GDP to grow by 0.5%, and the UK economy to contract by 0.4%. port-price growth. This produces immediate in ationary e ects, but, over time, it erodes real in comes and suppresses aggregate demand. France’s Treasury estimates that real income losses, compared to pre-pandemic levels, amounted to 3% of GDP at the end of 2022, owing to the terms-of-trade e ect.

Sta -Level Agreement with the International Monetary Fund. By this depreciation the cedi follows its trend to become the second weakest currency among 15 top currencies in Sub-Saharan Africa in January 2023. It is still currently in that position.

It sold at ¢13.10 to one US dollar on the forex or retail market, but has since improved very slightly in value to ¢12.90.

The cedi recorded a sustained stability to the dollar and the major foreign currencies this week.

But the United States – a net energy exporter – is not facing any such shock, so the factors driving US in ation must be di erent. In their e orts to ensure price stability, central banks should account operation.

“I must reiterate that; no single Member State can make signicant strides on their own.

Areas such as maritime security, maritime safety and navigation, port and infrastructure development, environmental protection, sheries amongst others can only become e ective when approached with a coordinated and integrated e ort,” the Minister said this at the 17 Extraordinary Session of the General Assembly of MOWCA in Accra.

Mr. Asiamah who is also the chairman of MOWCA also encouraged members to focus on actions that will ensure its people bene t while tackling some deep-seated issues, including rules of procedure, nancial central banks’ e orts – in particular, their hawkish rhetoric – are working. In ation expectations have indeed stabilized in the eurozone, the US, and the United Kingdom. But there is reason to fear that policymakers are going too far too fast – especially in Europe, where the energy crisis is now taking a large toll on real disposable incomes.

Fast seems to be the point. Based on the ECB’s own forecasts, one regulations and conditions of sta . Further, Mr. Asiamah stated that member states dependence on imports of nished goods and exports of raw materials can only be facilitated by shipping which is a major activity in maritime industry.

It is estimated that about 80percent of international trade is done via maritime space, with the minister adding that shipping remains the most-e ective way of transporting any large/bulk amount of goods over a great distance.

The Minister of Foreign Affairs, Shirley Ayorkor Botchwey, who was the guest of honour indicated that the organization sumer in ation will fall to 1.4% –well below the 2% target – by the fourth quarter of 2024. In the US, the Federal Open Market Committee’s median projection for personal consumption expenditure in ation is 2.5% for 2024. These are very sharp decreases, by historical standards. When Paul Volcker became Fed Chair in the summer of 1979, the annual in ation rate exceeded 11%. At the end of 1982 – after two recessions, the

Why are today’s central bankers in such a rush? Given stable in ation expectations, one might infer that policymakers fear the emergence of a new round of in ationary pressures, as pro ts and wages, supported by a relatively strong labor market, catch up to prices. But there is little evidence of wage-price spirals in Europe so far. In the eurozone, forward-looking indicators of wage development are at. Moreover, the institutional mechanisms, such as the degree of wage indexing or unionization, that may favor such spirals are weaker today than they were in the Another possible explanation is that policy preferences have shifted over the last few decades, with lower in ation now considered to be worth a greater sacri ce in terms of economic growth. But this seems unlikely, given the crises with which all three economies – especially the eurozone – have grappled over the last 15 years, and the growth headwinds they face today.

The 2007-09 global nancial crisis marked the beginning of a dismal decade, particularly for Europe, at the end of which the COVID-19 pandemic upended the global economy.

Since the fourth quarter of 2019, US GDP has grown by just 4.4%, but the eurozone has achieved only 2.2%

It is hard to imagine any of these economies making it through anoth er decade of slow growth without su ering serious losses to potential output or doing lasting damage to the most vulnerable segments of so ciety. Such protracted economic stagnation would most likely have severe political repercussions as well, particularly in the EU and the UK. Perhaps, then, central banks are moving so fast because they believe that rapid disin ation will not carry such high costs, in terms of output and employment, as it did in the 1980s. But given all the academic evidence to the contrary, this also seems implausible. In fact, monetary tightening will do more damage to output and employment when ination is fueled by a terms-of-trade shock that erodes real income – the case in Europe today – than when excessive aggregate demand is the culprit.

The only other possible explanation for central bankers’ haste is that they know something we do not. If so, they should explain it. Otherwise, they should proceed with caution, recognizing that continued rapid monetary tightening may bring huge economic costs. It may also reap the whirlwind of a backlash which threatens central bank independence.