“If the fundamentals are weak, the exchange rate will expose you”, these were the exact quotes of the then Vice Presidential Candidate Dr. Mahamudu Bawumia during his public lecture while in opposition.
Speaking to this on Accra-based Peace FM, the Vice President disclosed that the fundamentals of Ghana’s economy are now strong as compared to what they inherited.
“The fundamentals are now strong and the depreciation is around 2%. Since 1992 the cedi has not been this strong despite the devastating effect of COVID-19 globally”, he stated.
He revealed that the cedi, though is currently ranging between GH¢5.7 against the US Dollar, it is within the range of the fundamentals.
“We have been able to lock the cedi within the range of the fundamentals and the microfinance fundamentals are also in the best of shape”, he added.
Last year, Dr Bawumia in responding to a similar question was quoted to have said “You will recall that I stated in 2014 that if the fundamentals are weak the exchange rate will expose you. That was true then and it is true now. It is 100% correct. So if the fundamentals are weak the exchange rate will expose.”
“But it’s warped logic to jump from that to a conclusion that if there is depreciation in your currency then the fundamentals must be weak. It is a very warped logic. If the fundamentals are weak, the exchange rate will expose you but if the exchange rate moves, you cannot jump to that conclusion that the fundamentals are weak. That defies logic. There could be other external factors causing the exchange rate depreciation.”
“For example, if I tell you that if your leg is broken, you are going to be unable to walk then I’m somewhere and somebody comes to tell me that this person is unable to walk. Can I conclude that the person’s leg must be broken? There can be other reasons why you cannot be able to walk. But the NDC logic will insist in the face of contrary evidence that since you cannot walk then it means your leg must be broken,” he insisted,” the Vice President stated.
Source: My News GH
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