Associate Professor of Finance at Andrews University, Williams Kwasi Peprah has responded to former Vice president, Dr. Mahamudu Bawumia’s claim that the ruling National Democratic Congress (NDC) cannot be credited for the cedi’s recent performance against the dollar.
Dr. Bawumia claimed that the NDC cannot name a single policy of theirs that has led to the cedi’s strength against the dollar and other major currencies in the world.
“If you are to ask the NDC to point out exactly what policy they have implemented that has resulted in the appreciation of the cedi.”
Reacting to this statement, Professor Kwasi Peprah said the decision of the John Dramani Mahama government to reduce spending is also a policy unlike the NPP who went on a spending spree while in power.
“We have seen a reverse of interest rates between the NPP and NDC era. In the NPP era, interest rate was going up and in the NDC era, they have taken a certain action both on the open market operations by the Central Bank and the Treasury bill aspect by the Minister of Finance to make sure that interest rates come down.
“That is why you have seen that Treasury bill rate has moved from 23 percent in 2024 and now hovering around 15 percent. This is a government policy decision that they have taken so if Dr. Bawumia has an answer there is it and I’m using theory,” he said.
Professor Kwasi Peprah added that the current exchange rate we are seeing is as a result of the policies government has put in place.
“That is the monetary policy theory that they have used to address the interest rate and when you have a county where your interest rating is dropping, it will show in the form of exchange rate and your currency will appreciate.
