Thursday, May 03, 2007
from the "new money" dept.
Ghana's new currency will be introduced to the public today. I'll have more on the fun ahead. But, here's a local story about the new money and what it means.
Accra -- The Bank of Ghana (BoG) will this morning launch the new Ghana Cedis and Pesewas at the Bank’s auditorium, High Street Accra. The introduction of the new currency has become necessary as a result of re-denomination of the Ghanaian currency the cedi, which takes effect on July 1, 2007.
When the redenomination takes effect, ¢100,000 would represent the current ¢1,000,000.00 and ¢10,000 the current ¢100,000, while the current ¢10,000 would be the same as ¢1.00 within the new currency.According to the Ghana Central Bank however, the quantity and quality of goods that an equivalent of the money in circulation now can purchase would be the same as what the new cedi currency which would be launched tomorrow would be able to procure, hence the refrain that has run through adverts aired and played on air for some months now.
Officials of the bank say the added advantage of the new currency is that it would be less cumbersome to carry and also enhance business transactions while maintaining the value of the Ghanaian cedi. As to whether the new currency would match up with the major currencies of the world, Esi Hammond of the Public Relations Unit, Bank of Ghana asserted that the rate of exchange would still be determined by the market forces of demand and supply. “It is not the redenomination or re-calibration of the cedis that would check prices and thus influence inflation but the interplay of sound macro-economic practices.
Fiscal discipline is needed and when monetary policies go haywire that brings about inflation, but when government does its part and does not overspend, that checks rise in inflation which has been kept steady for a while,” the BoG official stated.