Adnan Adams Mohammed
Confident level in the stability of the local currency (Cedi) on the forex trading market is low as Bank of Ghana is not able to meet corporate demand.
Key stakeholders of forex trade are sceptical
as to how soon the cedi will strengthen against the major international trading currencies (US dollar, Euro and Pounds Sterling) as current rate of depreciation stand at 13.35 percent at the end of April.
Although, the Central Bank has mulled efforts by selling US$13 million in the spot market last week, this has failed to bolster the cedi, ending the week by 0.90% against the dollar on the retail market. However, on the interbank market, the cedi lost by 1.10% against the dollar.
Already, the Ghana Association of Forex Bureaux has claimed that the Ghana Cedi can only gain stability through miracle, if things remain as it is. This assertion is stemmed from the current downward trajectory of the Ghana cedi and the cyclical election-year trends, where governments loose control of the economy.
“Looking at the trends, and this year also being an election year, the government would have to spend a lot to be retained. I am not politicising, but that is the case”, Vice President for the Association, Dr. Alex Akpabli explained
“From my experiences over the years, I don’t see any appreciation going forward unless something dramatically or miraculously happens.”
Dr. Akpabli in an interview opined that, “We are not doing things that will bring foreign currencies into the country. We need to be innovative otherwise we will always see ourselves in a vicious cycle”.
Meanwhile, the Bank of Ghana’s forthcoming auction, where $20 million will be sold to Bulk Oil Distribution Companies (BDCs), is anticipated to alleviate some forex demand.
However, analysts caution that prevailing corporate pressures are likely to continue weakening the local currency.
It is currently one of the worst-performing currencies in the world.
Apparently, Fitch’s projected that the cedi will gain about 1.0% against the US dollar in 2024.
