GHANAIAN CEDI TO BE RE-DENOMINATED IN JULY 2007

Accra, Nov 29, Ghanadot.com - Ghana's Central Bank says it would introduce redenominated Cedi notes next year July as part of efforts to ease what Bank of Ghana (BoG)says is "deadweight burden" such as high transaction costs and the general high risk of carrying huge sums for transactional purposes.

The new note regime will set the new currency numeraire at 10,000=GHC1=100Gp.The external value of the Cedi will continue to be determined freely on the market.

The BoG said increasing difficulties in maintaining bookkeeping and statistical records and ensuring compatibility with data processing software, and strain on payment systems particularly ATM's as some of the other major reasons for the redenomination.

Mr Dorsoo said the redenomination has become desirable because over the past five years, macroeconomic stability had taken root; inflation was falling; interest rates are also falling while the local currency has become stable as its role as a store of value has been restored.

It has also become important because purchases require bundleof notes and forlarge volumes transactions, values run into trillions, overtasking accounting systems.

Mr Van Lare Dorsoo, Second Deputy Governor of the Bank of Ghana told journalists in Accra that the name of the new currency will be Ghana Cedi with the sub-unit been the Ghana Pesewa. (Gp) The series of notes would be as follows: GHC 1,GHC 5, GHC 10, GHC 20 and GHC 50 whilethe coins are 1Gp, 5Gp, 10Gp, 20Gp, 50Gp and GHC1.

On the internatioinal side, Mr Dorsoo said currently 1,000,000 at the exchange rate of $1=C9200 will yield $ 108.7. With the re-denomination, C1,000,000=GHC100 which will also yield $ 108.7.

Mr Ernest Addisson, Head of Research of BoG indicated that the old Cedi notes and coins would be withdrawn from circlulation starting from July 2007 over a period of at least six months.

"This starting date has been c hosen to allow for familiarization before the cocoa season begins in October 2007," Mr Dorsoo stressed , adding that, "both the old and new bank notes and coins would be in physical circulation over six months."

The new notes will have the same external value.

Mr Kwadwo Baah-Wiredu, Minister of Finance and Economic Planning described the exercise as a process to make life more easier for business operators, saying it was a natural sequence to cut some zeros off our notes.

Dr Paul Acquah, Governor of Bank of Ghana, announced the decision last week Saturday.

Ms Catherine Ashley, Head of Issue at the Central Bank said adequate educational programmes are been designed and would run over the six months period.

Ghanadot.com



 

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