The Vice Presidential candidate for the New Patriotic Party Mr Mahamudu Bawumia during his public lecture has said that the exchange rate will expose you if the fundamentals are weak.
“If the fundamentals are weak, the exchange rate will expose you” he noted in the exact words.
At an interview at Peace Fm in Accra Today Tuesday 25 August, 2020 disclosed that the fundamentals are now stronger compared to what they came to inherit.
“The fundamentals are now strong and the depreciation is around 2%. Since 1992 the cedi has not been this strong despite the devastating effect of COVID-19 globally”, he stated.
Saying that currently the GHS 5.7 against the dollar which is within the fundamental range
“We have been able to lock the cedi within the range of the fundamentals and the microfinance fundamentals are also in the best of shape”, he added.
Dr Bawumia was quoted for saying this last year when he responded to a similar question “For example, if I tell you that if your leg is broken, you are going to be unable to walk then I’m somewhere and somebody comes to tell me that this person is unable to walk. Can I conclude that the person’s leg must be broken? There can be other reasons why you cannot be able to walk. But the NDC logic will insist in the face of contrary evidence that since you cannot walk then it means your leg must be broken,” he insisted,” the Vice President stated
“You will recall that I stated in 2014 that if the fundamentals are weak the exchange rate will expose you. That was true then and it is true now. It is 100% correct. So, if the fundamentals are weak the exchange rate will expose.”
But is warped logic to jump from that to the conclusion that if there is depreciation in your currency then the fundamentals must be weak. It is a very warped logic. If the fundamentals are weak, the exchange rate will expose you but if the exchange rate moves, you cannot jump to that conclusion that the fundamentals are weak. That defies logic. There could be other external factors causing the exchange rate depreciation.” He added
Source: Mybrytfmonline.com
