Re-denomination of the cedi |
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The Bank of Ghana will re-denominate the current cedi by setting ten thousand cedis to one Ghana Cedi (GHc), which will be equivalent to one hundred Ghana Pesewas (Gp). That is c10,000 = GHc1 = 100Gp. |
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New notes and coins will be issued to replace the existing notes and coins over a period of at least (6) months, starting from July 2007. |
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Why is there a need for re-denomination? |
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The current note regime places a significant burden on the economy in terms of: |
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- Transactions cost
- General inconvenience and high risks of carrying loads of currency
- Difficulties in maintaining bookkeeping and statistical records
- Problems with accounting and processing software
- Strain on the payments system, e.g. ATM withdrawals
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What is replacing the old notes and coins? |
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The following notes and coins will be used |
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NOTES |
COINS |
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GHc50 |
GHc1 |
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GHc20 |
50Gp |
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GHc10 |
20Gp |
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GHc5 |
10Gp |
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GHc1 |
5Gp |
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1Gp |
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to replace the existing notes and coins of |
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NOTES |
COINS |
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c20,000 |
c500 |
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c10,000 |
c200 |
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c5,000 |
c100 |
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c2,000 |
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c1,000 |
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What will be the relationship between the old and new notes and coins? |
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Since c10,000 = GHc1 |
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c500,000 |
= |
GHc50 |
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c200,000 |
= |
GHc20 |
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c100,000 |
= |
GHc10 |
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c50,000 |
= |
GHc5 |
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c10,000 |
= |
GHc1 |
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c2,000 |
= |
20Gp |
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c1,000 |
= |
10Gp |
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c500 |
= |
5Gp |
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c100 |
= |
1Gp |
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Will I lose value if I exchange my old notes and coins for new notes and coins? |
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NO. The new notes and coins will have the same purchasing power as the old ones. For example: |
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A 'trotro' of c2,000 will now cost 20Gp |
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A rent of c500,000 will now be GHc50 |
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Does it mean that the cedi is going to be devalued or revalued? |
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NO! The old and new notes and coins will have the same external value, which will be determined freely on the market. For example, if the day's exchange rate between the cedi and the dollar is $1=c9,200, then the exchange rate of the Ghana Cedi is |
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c9,200 = GHc0.9200 = 92Gp = $1 |
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Similarly |
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c17,400 = GHc17,400 = £1 |
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For example, if $100 remittance from abroad gives you c920,000 in the old currency at the current exchange rate, it will be equivalent to GHc92 in the new currency since c10,000 = GHc1. |
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What happens to the old notes and coins when the new notes and coins are introduced? |
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The old notes and coins will be in physical circulation together with the new notes and coins. Prices and fees will have to be quoted in both the old and new notes and coins for the transitional period. |
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What happens after the transition period? |
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You will still be able to exchange the old notes and coins for new notes and coins at any bank or the Bank of Ghana. The old notes and coins will cease to be legal tender and will no longer be in use. |
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Is the change in name of the cedi to Ghana cedi permanent? |
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When the transition period is over and only the new notes and coins are in circulation, Ghana cedi will become simply known as the cedi. |
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Will this exercise lead to price increases? |
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NO! The basket of goods and services that the old notes and coins can buy would be the same as what its equivalent new notes and coins will buy. For comparison, prices will be quoted in both new and old notes and coins at the same time over the six-month period. |
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Will this affect wages and salaries? |
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NO! Wages and salaries will be denominated in the new currency but its value will remain the same. For example, if you are now earning c500,000 a month and you spend c400,000 on your household needs and save c100,000, i means that you will now earn GHc50, spend GHc40 on your household needs and save GHc10. Thus your situation remains the same. |
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