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General News
Gov’t Has No Intention Of Closing Foreign Accounts 6/10/2012

Government has denied reports that it is considering adopting a new policy that will deny private individuals and some corporate institutions the opportunity to open and maintain foreign accounts with banks in the country as a measure to halt the free fall of the cedi.

Reports in the media suggest that government, through the central bank, was thinking of implementing this latest move to augment processes of mitigating the high levels of dollarization in the country, to reduce the pressure on the local currency.

But John Jinapor, Spokesperson for the Vice president, has discounted the news.

Speaking on Peace FM’s morning show "Kokrokoo", Mr. Jinapor stated that his own investigations have revealed that there was absolutely “no truth” in government freezing or closing foreign accounts in the country.
“I have had the opportunity to sit in some of the economic management meetings and I can say that the news is a hoax. A lot of proposals have come up with on how to save the cedi from falling and at the end the best decision will be communicated. As far as I know, government hasn’t taken any decision to close foreign accounts,” he said.

To him, the story is a deliberate attempt by some persons to frustrate government’s effort in halting the depreciation of the cedi. He attributed the fall of the cedi as against some major foreign currencies to the higher demand of the dollar and speculation.

“When demand outstrips supply, it creates problems…and speculations destroy the whole thing. When people begin to speculate unnecessarily and people begin to think the dollar would rise, what eventually leads to is hoarding. Even if the government pumps in more dollars, it doesn’t solve the problem because people anticipate that it would go up more. People might even go and buy (the dollar) and this creates an equilibrium which worsens the case,” hesaid.

According to him, the "excess liquidity in the system" is also a factor. “The timing of the story is alarming and could create panic,” he said and urged those who put out such stories to do their background checks well by speaking to the entities involved. Source: Chris Joe Quaicoe/Peacefmonline.com

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