Cedi Falls To Record Low Since Akufo-Addo Won Power

Businesses are calling for action as the country witnesses a period of a fast depreciating local currency.

Owners of some forex bureaux are demanding that the Akufo-Addo government deals with the situation as it is affecting their business.

The cedi has hit one of its highest falls so far for this year reaching of ¢4.85 to one United States dollar.

The drop is affecting importers who have to issue more cedis for the dollar and other major trading currencies.

Joy Business’ checks show that most of the banks are exchanging one dollar for ¢4.82 and ¢4.85 which is a loss of ¢0.07 in value.

“When the cedi depreciates like this people decide to hold onto their dollars so business slows down but when the cedi appreciates people find no reason to continue holding their dollars so they let go.

Related: 'Karma is a bitch' - Ato Forson tells Bawumia as cedi depreciates

“People are saying there is nothing going on in town so the dollar is scarce. Although the demand for the dollar we don’t have any to sell to the customers and the banks also don’t supply it to us,” one owner of a forex bureau told.

Cedis journey so far…
Some of the banks have explained that the development is because most foreign investors are trying to get out of the local bond market due to higher returns in the US market.

According to sources, some of the investors are not bringing in the required dollars due to concerns with the interest on long-term bonds as well as the outlook.

Other banks have also said the Central bank is not releasing enough dollars into the system to meet their demands which has contributed to the depreciation of the cedi. They maintain the situation would not have gotten worse if the regulator has intervened to earlier.

Yet again, another school of thought claims the cedi is overvalued and some level of depreciation is required to get it right levels.

They argue that if the challenge is not contained very soon to prevent further depreciation, that would be devasting for the economy.

But the Head of Finance Marketing at the Bank of Ghana (BoG) Treasury, Stephen Opata disagrees arguing they have increased the dollar on the market.

“I am expecting that we will soon have a stable currency as we have experience for most of the first quarter and this conversation will be a thing of the past,” he said.

Meanwhile, businesses fear the impact of a sustained depreciation of the local currency will soon tell on prices of goods and services especially fuel prices, mortgage, food items and spare parts.

They say the development could also force BoG to hike interest rates to help minimise its impact on inflation.

Story by Ghana| Myjoyonline.com |Abubakar Ibrahim