Exchange Rate Reflects Economy, Not Defines It — Prof. Baah-Boateng Explains Ghana’s Cedi Movements

The Vice Chancellor of Methodist University and prominent economist, Professor William Baah-Boateng, has emphasized that exchange rate movements, while noteworthy, should not be treated as the definitive measure of Ghana’s economic health. Speaking on Channel One TV’s The Point of View on Monday, September 8, Prof. Baah-Boateng explained that currency fluctuations are more reflective of broader economic trends than standalone indicators.

“Exchange rate is a symptom of how the economy is performing or the undercurrent within the economy,” he said. He stressed that while the value of the cedi draws public attention, it primarily mirrors how the nation interacts with global trade and international markets rather than serving as the ultimate gauge of economic success.

Prof. Baah-Boateng highlighted that sudden appreciation or depreciation of the cedi often signals deeper structural dynamics within the economy. Factors such as trade imbalances, capital flows, productivity levels, and the effects of fiscal and monetary policies play a critical role in shaping currency movements.

He further advised policymakers and the public to look beyond the numbers. “So the moment you see the exchange rate appreciating or depreciating, it means something is happening,” he noted, urging decision-makers to investigate underlying causes rather than reacting solely to currency trends.

His remarks come at a time when the cedi’s performance against major foreign currencies has been under intense scrutiny in Ghana. Many citizens interpret its movements as a direct reflection of economic stability, making Prof. Baah-Boateng’s clarification especially relevant for understanding the complex factors influencing the nation’s financial landscape.

Source: Citi newsroom