BoG urges West African central banks to safeguard currency value
The Bank of Ghana (BoG) has asked West African central banks to safeguard the value of their currencies by initiating policies that prevent or minimise money laundering and counterfeiting.
The Head of Currency Management Department of BoG, Ms Catherine Ashiley, said West African central banks must endeavour to adequately meet the demand for money by the public.
Speaking at a regional workshop on “Banknote and currency management and forecasting by central banks” in Accra, Ms Ashiley said when confidence in the currency was strong it fostered monetary and financial stability- a precondition for achieving sustainable economic growth.
“Effective currency management depends on excellent information and insightful analysis,” she said, adding that “an effective currency management begins with a strategic analysis of the currency life-cycle.”
The currency management boss of the BoG was, however, worried that because West African economies were predominantly cash based, it reflected in economic agents’ preference for cash, which weakens the legal system to enforce contracts and the development of payment systems.
She, therefore, called on central bank managers to chart new directions, to be consistent with best practices, in order to printing and minting currency.
According to Ms Ashiley, note designs present series of interlocking challenges for currency managers. New designs, she said, must win public acceptance, incorporate requisite security features that meet durability and machine processing standards.
“The proliferation of Automated Teller Machines (ATMs) has also had a considerable impact on note design and thus, sharpened the focus for both commercial and central banks. For instance, the growing network of ATMs has affected compositional shift from lower denomination notes to higher ones.”
She added that “some central banks have moved from cotton based paper substrate to polymer notes, in line with technological developments, changes in world- wide trends on security of currency and the costeffectiveness of production and handling.”
The Director General of West African Institute for Financial and Economic Management (WAIFEM), Professor Akpan H. Ekpo, in his address, reiterated the need for the regional workshop, adding that” it is necessary, given the fact that cash is still central to currency management in almost all the countries in our sub- region.”
He said although efforts were being made towards the achievement of a cashless economy in some of our jurisdictions, the important role of cash management, under the present circumstance, called for efficient and effective currency management to meet Professor Ekpo, thus, advised central banks not to undermine currency management, as “the integrity of a currency and its efficient supply are clear indicators of a well-functioning central bank.”
The WAIFEM and Currency Research (CR) are the organisers of the Accra workshop.
The objective of the workshop is to explore key challenges facing central banks in currency management and how they are tackling them. Specifically, the course is designed to deepen knowledge and upgrade the analytical skills of participants in performing the currency management function. It is also designed to enhance participants’ forecasting techniques and expose them to contemporary issues in banknote and currency management.
Some of the themes to be covered include substrates and counterfeits, coins and notes, currency forecasting, vault management and note fitness, cash management, circulation and processing and other issues existing in the cash environment.
Participants were drawn from developing countries such as Nigeria, Sierra Leone, the Gambia, Liberia, Guinea, Malawi, Uganda and Chile.
The workshop is targeted at senior/ executive level officials of central banks and other monetary authorities that are involved in currency management issues but will also be beneficial to other stakeholders to scale up their knowledge in currency management issues.
Source: Daily Graphic