What depreciation of the cedi is. Causes of

Report
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PRESENTERS
Keziah Naa O. Lamptey
Mary Odoi Manteley
Daniel Mensah Anum
Raphael Ayambila
Stephen Afutu
Esi Mbrah Amponsah
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What depreciation of the cedi is.
Causes of depreciation of the cedi.
Effects of depreciation of the cedi.
Measures to control the
depreciation of the cedi.
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INTRODUCTION
In recent times, the Ghana
cedi has lost grounds
against the major
international currencies
such as the United States
Dollar, the British Pounds
Sterling and the European
Union Euro.
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What is depreciation of the cedi
Depreciation of the cedi is the
erosion of the purchasing power
of the Ghana cedi relative to
other currencies. It is basically
the loss in the value of the cedi.
Ghanaians have lost confidence in
using the cedi as a means of
exchange for goods and services.
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
CAUSES OF DEPRECIATION
OF THE CEDI
Individuals and some businesses
who keep foreign currency accounts
in Ghanaian banks, account for the
depreciation of the cedi.
 Inflation is also responsible for the
depreciation of the cedi.
 Trade Imbalance is another cause
of the depreciation of the cedi.

Interest rates also account for
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the depreciation of the cedi.
EFFECTS OF THE DEPRECIATION OF
THE CEDI.
Effects on export operations: But now
this same exporter, still exporting 10,000
tons of cocoa would receive $3,571.
Ghc2.80=$1
10,000=10,000×1 =$3,571
2.80
Thereby incurring a loss of $6,429.
Effects on import operations: But now
this same importer, still importing
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CONTINUATION OF EFFECTS OF
DEPRECIATION OF THE CEDI.
the same quantity(20,000) would pay
more for it because of the change in
exchange rate. The importer will now
exchange $56,000 for the same 20,000
quantities. Ghc2.80=$1
?=20000×2.80
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=$56,000
Therefore, the importer would incur an
additional cost of Ghc 36,000
Effects on consumer
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Effects on government
MEASURES OR SOLUTIONS TO
DEPRECIATON OF THE CEDI
People should be allowed to keep
foreign account currencies in
banks, but rather withdrawals
should be allowed only in cedis.
Interest rates should be readjusted.
Ghana must embark on massive
export-drive programs .
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 The state should use its taxation
power to discourage importation.
END OF PRESENTATION
THANK YOU
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