Undisciplined fiscal deficits, loose monetary policies drivers of exchange rate instability – Dr. Atuahene

Dr. Richmond Atuahene, a banking consultant, has attributed Ghana’s exchange rate instability to undisciplined fiscal deficits and loose monetary policies, particularly from 2020 to 2023.

Speaking at the GNCCI Dialogue Series, he highlighted how increased government spending and money creation led to inflation and currency depreciation. This instability resulted from fluctuating supply and demand, limited access to international capital, and other factors. The depreciation caused high inflation, reducing consumer purchasing power and demand for non-essential products.

Dr. Atuahene urged the government to renegotiate mining contracts and diversify exports beyond cocoa to stabilize the cedi and create a sustainable economic environment.