The Governor of the Central Bank of Ghana, Dr Ernest Addison has explained the rationale behind government’s policy decision to introduce new Bank notes of Ghv100, Ghc200 and 2Ghc coin.
Addressing a presser covered by TheNewsGH.com, the Governor said “twelve years after the redenomination exercise, sustained periods of high inflation and the perennial depreciation of the currency have eroded, in real terms, the face value of the series of the notes” forced government to take the decision.
He explained that a lot of thinking and consultations took place.
A lot “thinking went into the decision to introduce
the higher denomination banknotes. The structure of the banknote should align well with the needs of the people who use it for their daily transactions. We need banknotes and coins that are convenient for most people to use, high quality, secure and cost effective.” He added.
A promotional release by BoG read in part:
High levels of inflation and currency depreciation in the past have eroded some of the gains from redenomination. The deadweight burden, reflected in high transaction cost has re-emerged. This set of higher denominations will address this increased transaction cost, especially in high-valued transactions in a cash based economy. Also, the structure of the banknotes denomination has changed resulting in a shift in demand for higher denominations (GH¢50 and GH¢20 account for about 70% of the total demand), reflecting the expansion in income and prices.
Introduction of the higher value denominations in circulation are therefore necessary to ensure customer convenience, reduction in the costs of printing and other currency management processes.