Joseph Coomson
4 July 2007
Accra — A few Automated Teller Machines (ATMs) have been issuing out the notes and its immediate advantage - convenient to carry - easily tells in the hands. There were equally long queues in almost all banks in the country especially in the capital and Regional capital towns.
There were however some level of disappointment across Accra, as most customers hoping to have a feel of the new currency and went to their banks very early in the morning returned empty handed as Automated Teller Machines (ATMs), usually operational 24 hours, were not working.
However, the new currency was in full circulation in some market centres and lorry stations in Accra.
Most of the people The Business Chronicle spoke, who have had a feel of the new currency, indicated that the new currency is beautiful and portable to handle. "The new Ghana Cedi is more beautiful than the former one," Kwaku Amagashie, a taxi driver stated.
The Government had pegged July 1 as the date for the official circulation of the new currency (notes and coins), but the Republic Day holidays (Sunday and Monday) ensured that there was no transaction in the new currency by members of the public.
The new currency will be in circulation along with the old one, which the Central Bank says, will be gradually withdrawn from circulation by the end of the year.
Until then, the two currencies will be legal tender.
The new currency is being rolled out in a redenomination exercise, which has promised an equal value.
The re-denomination of the cedis sets 10,000 cedis to one new Ghana Cedi (GH Cedi) which would also be equivalent to 100 Ghana Pesewas (GP). This means that 500,000 cedis would be equivalent to 50GH Cedis; 200,000 cedis would be equivalent to 20GH cedis; 100,000 cedis would be equivalent to and 10GH cedis; 5,000 cedis would be equivalent to 50Gp; 2,000 cedis would be equivalent to 20Gp and 1,000 cedis would be equivalent to 10Gp.
The series of the new set of notes would be 0ne GH Cedi, Five GH Cedis, 10 GH cedis, 20 GH cedis and 50 GH cedis whilst the coins take 1Gp, 5Gp, 10Gp, 20Gp, 50Gp.
Both the old and new cedi bank notes and coins would be in physical circulation for a period of six months after which the old notes and coins would only be exchanged at the Bank of Ghana and any commercial or rural bank.
After the period, the old notes would not be legal tender but could be exchanged at the banks for the new currency.
The external value of both the old and new currencies would be the same, as the purchasing power would not change because the cedi would not be devalued or re-valued.
Experiences elsewhere had shown that re-denomination of a currency by dropping zeros in the relative prices of domestic price relation led to significant efficiency gains in the context of strong economic fundamentals and macroeconomic stability.
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