Economist at the University of Ghana Business School, Prof Lord Mensah, says it does not make sense any longer for investors to buy treasury bills.
According to him, Ghana has gotten to a point where “the cedi deteriorates against the dollar where people start seeing the dollar as a store of value.”
Speaking in an interview on Joy News‘ PM Express on Wednesday, he explained the reason for his assertion.
“If you take our interest rates structure, you will realise that none of them goes above inflation, so effectively the real rate of inflation is negative. So it does not make sense to keep your money in treasury bills anymore,” he pointed out.
His concern is in the wake of the high cost of inflation and the continual depreciation of the cedi.
A recent currency performance ranking by Bloomberg classified the cedi as the worst-performing currency across the globe after Sri Lanka’s rupee.
Bloomberg tracked the performance of 150 currencies in the world and the cedi placed last but one in terms of performance since the beginning of the year.
In less than 8 months, the cedi has come under intense exchange rate pressure due to its continuous depreciation in relation to some major international currencies such as the dollar, pound, and euro.
He, however, advised that the best way to keep investment is to “buy the dollar and store it.”
He added that for this reason, he will not fault the Bank of Ghana for increasing the monetary policy rate.
This, he stated, is because the Central Bank wants to “discourage investment in treasury bills”.
Source: Myjoyonline