Speculations will aggravate Cedi depreciation – AGI

Speculations over the depreciation of the cedi could further affect its performance in the future, Chief Executive Officer of the Association of Ghana Industries (AGI), Seth Twum Akwaboah has stated.

He said although, the depreciation was adversely affecting businesses he was of the conviction that it was just temporary.

“The Cedi is depreciating and it’s of concern to our businesses. It’s a seasonal thing and happens once a while. It escalates when we speculate and we give up so soon and give up on the impression that it can’t be solved soon. In that case, people who don’t need the dollar start to buy and hoard foreign currencies. This negatively affects the cedi,” Mr Twum Akwaboah said in an interview.

He said the permanent and long-term solution to addressing the downward trend of the cedi would be to increase more exports to decrease demand for the dollar.

Meanwhile, the Bank of Ghana is reported to have sold $157 million to banks this month in an effort to control the depreciation of the local currency.

The Bank of Ghana (BoG) has also assured that the recent blip in the foreign exchange market that saw slight depreciation of the cedi against the dollar is temporary.

The BoG says the current situation is a reflection of a spillover from external developments.

Mr Steve Opata, Director, Financial Markets Department in an interview recently said changes in global financing conditions due to rising oil prices and hikes in US interest rates is being transmitted to frontier market economies in Sub-Saharan Africa.

He said Ghana is in a strong position to overcome the exchange rate volatility due to strong economic fundamentals and excellent external payments position.

He said the bank has adequate reserves to take care of the situation adding that, “Ghanaians and participants in the market don’t have to worry.”

 Business Desk Report

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