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Turner, Phillip, and Jozef Van’t dack, 1993, “Measuring International Price and Cost Competitiveness”, BIS Economic Papers, No. 39, (Basle, Switzerland: Bank for International Settlements).
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Prepared by Stefania Fabrizio, with the collaboration of Andrew Bvumbe.
In the period from independence to 1971, the cedi was devalued only once in mid-1967.
In April 1983, the government also introduced a system of bonuses for foreign exchange receipts and surcharges for payments. This cumbersome system was abolished in October 1983.
Foreign exchange for debt service payments for debt contracted before January 1, 1986, petroleum imports, and essential drugs were provided at a pegged rate (C90 per US dollar) through the first window. All other transactions were conducted through the second window. Foreign exchange earnings from cocoa and residual oil products were surrendered at the first window exchange rate.
The trading patterns and their relative weights for the calculation of the REER are those used by the IMF’s Information Notice System.
The ULCI is defined as the ratio of the index of monthly compensation per worker to the index of monthly production per worker in the manufacturing sector. The calculation of the ULCI for Ghana for the period 1992-97 is based on the assumption that the growth rate of the monthly compensation per worker and the number of workers in the manufacturing sector are equal to the growth rates of the average monthly salary of contributors to Ghana’s social security system and the number of contributors to the system in the manufacturing sector, respectively.
The trading partners for the calculation of the ULCI-based REER are those used by the IMF’s Information Notice System, excluding Brazil, China, Malaysia, and India. The selection of the trading partners was limited by the availability of data.
The major trading partner of Ghana, is the United Kingdom, which accounts for almost a 17 percent weight in the effective exchange rate. The major trading partner of Burkina Faso, Côte d’Ivoire, and Togo is France; for Nigeria is the United Kingdom.