The Director of Research at the Institute of Economic Affairs (IEA) Dr. John Kwakye has indicated another redenomination of Ghana’s currency, the Cedi, if depreciation against US dollar is not halted.
According to the Economist, unless the managers of the economy rein in inflation and depreciation, Ghanaians should expect another redenomination, he suggested.
The August inflation has reached 33.9 percent. This is a 2.2 percent increase in the July figure of 31.7 percent.
Dr Kwakye tweeted “Phasing out 1 and 2 cedi notes from the economy as planned by BoG, will not only put pressure on the 5 cedi notes, but will also further fuel inflation.
“If we don’t rein in inflation and depreciation, it won’t be too long before we undertake another redenomination.”
In July 2007, the Cedi (¢) was redenominated to the Ghana Cedi (GH¢), such that ten thousand Cedis was now equivalent to one Ghana Cedi.
The re-denomination did not affect the intrinsic value of the currency – “the value will be the same”.
Two of the reasons given by the Central Bank for the re-denomination were the increasing difficulty in maintaining accounting and statistical records; and problems with accounting and data processing software.