The Governor of the Central Bank of Ghana, Dr. Ernest Addison has explained the rationale behind the government’s policy decision to introduce new Banknotes of Ghc100, Ghc200, and 2Ghc coin.
Addressing a presser covered, 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.
He continued that 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.”
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 denomination of the banknote has changed resulting in a shift in demand for higher denominations (GH¢50 and GH¢20 accounts 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.
Part of this text culled from mynewsgh.