A Banking Consultant Mr Richmond Attuahene has stated that the practice of keeping huge volumnes of cash at home affects the calculation of the money supply aggregate in Ghana.
“In Ghana, we have M1 and M2 which is all about the aggregation of money so far in the economy.
“If somebody is holding such a quantum of money, it means all the figures we have been churning out in the M1 supply and M2 supply are not complete, so it makes it very difficult,” he said on the Ghana Tonight Show on TV3 Wednesday, July 26 while commenting on the situation where some foreign cash was kept in the bedroom of former Minister of Sanitation and Water Resources Cecilia Abena Dapaah.
Madam Cecilia Dapaah was said to have kept $1 million, €300,000, and millions of undisclosed Ghana Cedis at home.
Mr Attahene further stated that the practice deprives banks of funds to loan to the private sector for economic development.
He stated that this practice affects the effectiveness of the monetary policy.
“It also deprives the banks. when we take deposits, we then churn them into investments and be lending to the private sector so we move the money from the surplus area to the deficit area to support the private sector in the growth of the economy.
“So seriously, somebody hiding this money, it means that the economy is being deprived of money to be used in loanable funds to the private sector,” he said.
Earlier, Governor of the Bank of Ghana (BoG) Dr Ernest Addison also said that the trend where large volumes of foreign currencies especially dollars were kept in the homes was a worry to the central bank.
Asked whether the BoG was worried over Cecilia Dapaah’s issue, while speaking at the 113th Monetary Policy Committee (MPC) press conference in Accra on Monday, July 24, Dr Addison said “It is a worry to all of us but it is matter in court so there is not much to say about it.”