The Governor of the central bank announced the introduction of the new notes at a press conference in Accra on Friday, 29 November 2019 with the explanation that the move is aimed at addressing the deadweight burden on the economy from past inflation and cedi depreciation. The BoG also introduced GHS2 coin.
Speaking at the launch of the new notes, Dr Ernest Addison urged the public not to misinterpret the introduction of the high-value notes to mean a shift from the central bank’s policy of pursuing a cashless society.
However, Mr Osei-Tutu believes the action of the BoG negates efforts in advancing electronic payment penetration across the country.
He told Joshua Kojo Mensah on Class91.3FM’s 505 news programme that: “They (BoG) are shooting themselves in the foot if they say that. In one breathe you want to promote a cashless society and in another breathe you are introducing a higher note as high as GH200, it is ridiculous, it is contradictory to whatever they are preaching to all of us”.
For him, the development comes as a surprise “especially, from the angle whereby there has been a stronger call for a cashless society in a modern economy where we find ourselves”.
He said he does not think that the reasons for the introduction of the notes “are stronger points enough to call for a higher denomination of GHS200 and GH100. I think the argument is not too strong for this”.
He further explained that “there is no economic indicator that says that” this move can tackle the depreciation of the local currency against other major currencies. The Ghana Cedi experienced a year-to-date depreciation of 10.37% and 11.2% against the US Dollar and the British Pound Sterling, respectively, as of 21 November 2019.
“I don’t see how this will shore up our depreciation against external currencies. It has absolutely no role to play,” he reiterated.
He added that he agrees with the BoG only on the fact that the cost of printing the new notes will be more efficient since several lower denominations will have to be printed at a higher cost for every GHS 200 currency, for example.
Mr Osei-Tutu also kicked against suggestions that the move will increase the inflation rate as he explained that consumer prices of goods and services will not rise as a result of the new notes.