Economic experts have cautioned the Bank of Ghana (BoG) to ensure that the introduction of the new cedi denominations into the economy will not affect the current volume of money in circulation.

Subsequently, they have advised the central bank to do all within its remit to limit the supply of the higher currency banknotes and restrict its access to big ticket businesses and transactions in a bid to contain any inflationary pressures the introduction could bring to the economy.

In separate interviews with the Daily Graphic in response to the introduction of the GH¢200 and GH¢100 banknotes in particular, the economists also called for intensified public education to erase the misconceptions about the action of the BoG and prevent the public from losing confidence in the local currency because of the introduction of the new denominations.

The economists were of the view that should the public lose confidence in the local currency, their only option would be to take refuge in foreign currencies, a development which would cause the cedi to depreciate further.

Although they welcomed the introduction of the banknotes by the BoG, they advised against any move that would create problems for the economy in the short to medium term.

Their views were among many that the Daily Graphic sought following the introduction of the new banknotes and a coin which will be in circulation from today.
Other views are from the Ghana Union of Traders Associations (GUTA), students and traders at Makola and Osu in Accra.

The GUTA President, Dr Joseph Obeng, also urged the BoG to manage speculations about the negative impact of the new denominations and encourage people to use them.

Extra caution

A Senior Economist at Databank, Mr Courage Martey, said if the higher denominations were limited to the payment of only big-ticket transactions, it would help curb the attendant challenge of inflation.

“I think the central bank needs to be extra cautious on how it intends to introduce the higher denominations in terms of how widely it circulates them. I expect the higher denominations to be very limited in supply and circulation,” he added.

Intensify education

The Director of the Institute of Statistical, Social and Economic Research (ISSER) of the University of Ghana, Professor Peter Quartey, for his part, called on the BoG to embark on a massive educational campaign to explain the rationale for and the benefits of the new denominations.

According to him, any misconceptions among the public about the new denominations could easily invalidate the rationale for the move by the central bank and create disruptions in the economy.

Inflation expectation
Prof. Quartey said one of the key issues the BoG had to manage was the impact of the new denominations on inflation.

According to him, if the introduction of the higher banknotes increased money in circulation, it would have a telling impact on inflation.

Presently, the speculation is that the introduction of the new currencies and a coin amounts to the printing of more money to improve liquidity in the system.

Prof. Quartey described that speculation as dangerous and urged the central bank to act swiftly to disabuse that notion, unless the new denominations were truly meant to increase money supply.


The Director of ISSER said the new denominations, if not managed properly, could lead to a depreciation of the local currency.

“We need to ensure that people do not lose confidence in the currency and attempt to take solace in other stable ones such as the United States dollar and the British pound or even the Euro. If that happens, it will put pressure on the cedi to depreciate further,” he said.

He said when people felt any inflationary pressure, their last option was to cushion themselves by acquiring more predictable and stable currencies, a development he believed could impact negatively on the local currency.

Impact on transactions

Prof. Quartey, however, said the new denominations would introduce efficiency in the system as far as financial transactions were concerned.

For instance, he said, people would not have to carry large quantities of cash on them to create suspicion for robbery and other risks.

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