Ghana introduces higher banknotes to drive ease of transactions but…
Following Friday, November 29, 2019 announcement of the Governor of the Bank of Ghana (BoG), Dr Dr Ernest Yedu Addison, heralding the introduction of new GH¢100.00 and GH¢200 banknotes to complement the existing series, financial experts have started expressing mixed reactions to the development at a time the world is going digital transactions.
Business Hilights Ghana Bureau chief recalls that few years ago, Ghana embarked on a value saving move on their currency (Cedi and Peswas) by deleting one zero in each denomination with the target of growing the value.
Whereas several analysts agreed that the policy paid off, there have been palpable fears that the recent introduction of higher denominations may spark off value reduction and inflation.
However, a Financial and Banking Expert, Nana Otuo Acheampong, says the introduction of higher banknotes would not threaten inflation fluctuation, but would rather ease high value business transactions.
According to him, “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.
Nana Acheampong further explained that when there is an expanded economy, it is imperative to introduce higher denominations to facilitate high-value transactions, stressing that small currency denominations often resulted in “dead weight loss” syndrome in the economy.
Besides, in the defense of the BoG Governor, Dr Addison, he argued that rather than cause inflationary trend, the new notes will among other things, ensure customers’ convenience, seamless transaction for high value business transactions and reduce the cost of printing the currency.