New higher banknotes not a threat to inflation – Financial Expert

By
Godwill Arthur-Mensah, GNA

Accra, Dec. 3, GNA –
Nana Otuo Acheampong, a Financial and Banking Expert, says the introduction of
higher banknotes would not threaten inflation fluctuation, but would rather
ease high value business transactions.

He said inflation is
the change in the purchasing power of money and introducing higher
denominations would not change the purchasing power of the currency or prices
of goods and services but just using higher denomination to buy items.

“The incidence of
inflation relative to higher denominations does not have any link at all,” he
said.

Mr Acheampong said
this in an interview with the Ghana News Agency, in analysing the
socio-economic implications for releasing higher denomination banknotes into
the economy.

Dr Ernest Yedu
Addison, Governor of the Bank of Ghana (BoG), on Friday, November 29, announced
the introduction of new GH¢100.00 and GH¢200.00 banknotes to complement the
existing series.

The move, the
Governor said, was to ensure customers’ convenience, facilitate easy
transaction for high value business transactions and reduce the cost of
printing the currency.

Asked whether the
introduction of higher banknotes was necessary, Nana Acheampong answered in the
affirmative, explaining that when there is an expanded economy, it is
imperative to introduce higher denominations to facilitate high-value
transactions.

He said small
currency denominations often resulted in “dead weight loss” syndrome in the
economy.

Commenting on the
recent Afrobarometre survey that revealed that 59 per cent of Ghanaians have
the perception that government was not steering the economy in the right
direction, Nana Acheampong entreated government to appreciate the value of
divergent views and re-strategise.

“In banking there is
a “Code to mine in complaints” and so anytime anyone complains, it means
something is not right, government should take it in good faith and correct the
things that are not right,” he said.

Nana Acheampong said
government is doing well in terms of the macroeconomic indicators and social
interventions like the Free Senior High School Policy.

He said it would
take time for government’s policies on the macroeconomy to be translated into
physical cash and urged the public to be patient with government.

GNA

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