market ; addressing ghana ’ s import dependence through the pursuit of structural reforms geared towards promoting local production ; continued improvement in the business environment, especially in the area of ease in doing business, to attract investments into the country ; these should include re - examining laws that serve to improve the business environment, pursuing business - friendly regulations, making it easy to move goods across the country, and pursuing policies to facilitate trade among others ; taking a re - look at ghana ’ s retention agreements and promoting local content, especially in the downstream oil sector, and finally ; promoting non - traditional exports, including areas such as tourism. i believe that these pointers will help shape the follow - up discussions on achieving exchange rate stability in a sustainable manner. thank you. figure 1 : year - to - date depreciation ( 2000 - 2018 ) figure 2 : year - to - date depreciation in the first quarter ( 2011 - 2019 ) figure 3 : recent trends in macroeconomic fundamentals source : bank of ghana figure 4 : recent trends in macroeconomic fundamentals figure 5 : daily cedi / dollar exchange rate

speech delivered at graphic business / stanbic breakfast meeting by dr ernest addison governor, bank of ghana at at labadi beach hotel on tuesday, april 23, 2019 introduction 1. ladies and gentlemen, let me begin by thanking graphic business and stanbic bank for the opportunity to speak on the topic : " achieving sustainable exchange rate : our options ” this topic is timely — coming at a time that we have successfully emerged out of a sudden bout of volatility in the exchange rate, which generated a lot of debate domestically and also externally. it is my expectation that my brief remarks and subsequently discussions will shape the narrative on currency and exchange rate management in the context of a small open commodity dependent economy that has adopted a flexible exchange rate regime to underpin the conduct of monetary policy. 2. the recent sharp movements in the exchange rate of the cedi generated considerable debate on the options that we have as a country to deal with the seasonal bouts of depreciation in a more sustainable way. before i jump into discussing the underlying causes of these sudden episodes of sharp currency depreciation, allow me to first put the key issues into context. 3. first and foremost, i think what we need to understand is that the exchange rate reflects a price. and, as is the case with all prices for goods and services in the economy, the exchange rate will change and respond to the dynamics of the economy and will always be subject to the dynamics of demand and supply. as a country, we have adopted a flexible exchange rate regime, which has served us well in the past and continues to do so under the bank ’ s inflation targeting monetary policy framework. 4. looking at the history, the flexible exchange rate regime has served ghana well, given the structural characteristics of the ghanaian economy. i am sure there are some schools of thought that harbour the idea of ghana pegging the cedi to one of the major trading currencies to achieve some stability. whilst this might sound appealing, empirical evidence, including analytical work by the imf shows that growth has been more robust in countries with flexible exchange rate regime than in countries with fixed exchange rate regimes. 5. as we all know, ghana ’ s economy is import dependent, hence the existence of persistent foreign exchange demand pressures by importers. in addition to these huge demand pressures, the seasonal repatriation of profits and dividends foreignowned companies reflects in significant outflow of resources out of the services and income accounts, exerting additional pressures on the