Tuesday, July 16, 2019

Rising Fuel Prices, Threat Of Inflation And Deterioration Of The Dalasi’s Value

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The rise in fuel prices should have been contained by savings when the world market price of oil goes down. However, the lack of a system through which oil prices could be stabilised undoubtedly would lead to a rise in prices especially transport fares.

Needless to say, when transport fares are raised the prices of other commodities will also be affected. This would also require demand for more foreign exchange to purchase more expensive imported goods. This would lead to a deterioration of the value of the Dalasi. Currently the government is purchasing energy from Senegal. Many food items are also purchased from Senegal. As prices increase and the demand for the CFA increases the value of the Dalasi against the CFA is bound to deteriorate. It is important for the government to look into ways and means of stabilising the price of fuel and increasing the productive base of the economy to have more grip in controlling the deterioration of the value of the dalasi currency which increases inflation.

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