The Answer To The Cedi’s Weakness Is To Address The Economy’s Fundamentals

"The Ghanaian Cedi has been on the decline for the better part of its history, apparently with no end in sight. An IEA study has determined that the long-run decline of the Cedi is influenced by economic fundamentals that drive the real rate towards its equilibrium level. Further, despite the recent sharp depreciation of the currency, there is no clear evidence of misalignment. In particular, contrary to expectation, the study did not find any significant “overshooting” of the equilibrium value or “real undervaluation.” The results of the study suggest that to stem the tide of depreciation, policy strategy must focus on strengthening the economy's fundamentals, with sustained macroeconomic stability and growth being at the center."