Speculating against the cedi will be irresponsible – Oppong Nkrumah – Nsemkeka
Member of Parliament (MP) for Ofoase Ayirebi and Ranking Member of Parliament’s Economy and Development Committee, Kojo Oppong Nkrumah, has cautioned against cedi speculation.
Speaking on JoyNews’ AM Show on Thursday, 29 May, Mr Oppong Nkrumah stressed that even though his party is in opposition, they will not engage in talking down the currency.
“I don’t think that speculating on the currency is a good thing. We spoke against it when we were in power; being in opposition, it will be irresponsible on our part to be speculating against the currency,” he said.
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He referred to past instances when others, while in opposition, speculated against the cedi for political gain.
“Some people did it when they were in opposition and they were looking for power; it may have served them well, but we will not do that,” he stated.
Mr Oppong Nkrumah said what matters now is for the government to be transparent about how it plans to keep the cedi’s recent gains stable.
“I think that what is important is that the government provides clarity on how it seeks to sustain the appreciation, especially in light of what all the independent watchers have explained is accounting for this appreciation,” he said.
He explained that market reactions would depend largely on whether traders and analysts believe the current appreciation is sustainable.
“Because the market will look at the sustainability and react. So if the market is of the view that this is sustainable, the market will react in a particular way. If the market is not of the view that this will be sustainable, the market will react in another way,” he explained.
Referring to a recent opinion, he said he found some of the cautionary insights useful.
“I have read a piece by David Ofosu-Dorte, who is cautioning against fears of a currency dump. And those fears can, for example, be addressed when there is clarity on that sustainability,” he said.
He emphasised that in the end, it is the market, not politicians, that will judge the government’s explanations.
“If a government says it’s good leadership, the market watcher, the dealers, the traders, they will make a decision whether that is a good enough explanation,” he added.
Mr Oppong Nkrumah also acknowledged the role of economists and academics in shaping market expectations in the recent appreciation of the cedi.
“I have been hearing the economists and all these professors commenting; they won’t necessarily just take the face value of what is happening; they will look at the reasons, and then they will also make a decision,” he said.
He continued by stressing that speculation is not helpful and that clear communication from the government will allow the market to respond accordingly.
“So I won’t speculate against the currency; it is not a responsible thing to do. But I think as the government provides some more clarity on exactly what policy or programme it wants to use to achieve sustainability, the market will then make a decision on it,” he reiterated.