An Economics lecturer at the University of Ghana, Dr. William Baah-Boateng, says the cost of doing business with banks in Ghana has increased three months after the Bank of Ghana (BoG) introduced new policies to halt the free fall of the Cedi.
According to him, per observation, “the cost of doing business with the banks as far as foreign exchange transaction is concerned has gone up. When I say the cost, I am talking about the time that is required to deal with the as far as foreign currency is concerned and not the money.”
Speaking on Eyewitness News on Monday on whether or not the BoG should extend the policy introduced to curb the free fall of the cedi, Dr. Baah-Boateng said the transaction cost makes it very difficult for people to do business, hence, the need for a review of some aspects of the policy.
He also noted that before the implementation of the BoG’s policy, the difference between the exchange rates of banks and ‘black market’ operators was marginal but upon the implementation of the new policies, the difference in exchange rates between the banks and the ‘black market’ operators have widened.
“It means that, people don’t feel comfortable dealing with the banks as far as foreign exchange is concerned; because as it is now Forex has moved underground [black market] more than to the banks…,’’ he said.
‘’Deposits into Forex accounts is not as it was; people are not willing to put their money there,’’ he added.
The economist further advised the BoG to address some of these issues and challenges that come with the implementation of the new policy.
The performance of the cedi has worsened as compared to other currencies in the last couple of months. This compelled the Central Bank to introduce some measures in fighting it.
The BoG in February rolled out some stringent measures to fend off mounting inflation and stabilize the Cedi.
The regulations require all commercial banks in the country to quote a two-way pricing of currency exchange and limit the spread on corporate transactions to a maximum of 200 percentage points.
By: Evans Effah/citifmonline.com