Some economists are impressing upon government, the need to do more in addressing the fundamental weaknesses in the economy - such as increasing production in agriculture and industry among others. This according to them is the only way the perennial challenges with the cedi can be effectively addressed.
The cedi recently recorded an impressive appreciation following the Bank of Ghana's dollar injection into the market from time to time. It has however started declining in value in the last few days.
During a panel discussion on the economy organised by Good Governance Africa's West Africa Centre, participating economists generally maintained the way out is for government to focus on the economic fundamentals.
Economist and Head of Finance at the University of Ghana Business School, Dr. Godfred Bokpin told JOY BUSINESS what is happening to the cedi is simply a reflection of the fundamentals of the economy.
"It is not the case that the Cedi is misbehaving on its own. The Cedi is as strong as the foundation which is the economy and with the economy we are talking about agriculture, industry and service. So when you have these sub-sectors doing well, the Cedi will be able to have the necessary support in order to maintain its strength against the major trading currencies because when the Cedi interacts with the other major trading currencies what is backing the currency becomes very important," he pointed out.
For him, instead of the Bank of Ghana being asked to stabilise the Cedi, the focus should be on the fundamentals of the economy. He indicated that when the fundamentals of the economy are put right, the Cedi will necessarily provide good feedback.
by: Farida Mohammed/ghanaguardian.com