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Ghana’s currency crossroads: The story behind recent exchange rate developments
['Grace Tsotsoo Quaye', 'Anane Agyei']
The Ghana Report
Yet, as the world reeled from the Covid-19 pandemic, Ghana’s currency began to appreciate moderately, while the equilibrium rate remained steady.
Source of Data: Author’s estimates based on the IMF’s Behavioural Equilibrium Exchange Rate (BEER) model.
In standard terms, the real exchange rate in Ghana during that period was aligned with its fundamentals.
This framework should inform exchange rate policy.
What remains unclear is how it has influenced the sharp and unsustainable appreciation of the currency, and whether the consequences outlined above will be considered in future exchange rate policy.