The President of the Ghana Union of Traders Associations (GUTA) has indicated that the cedi will see a further depreciation till the end of January 2023.
Dr Joseph Obeng said the current depreciation of the cedi could be attributed to the repatriation of the dollar to China by Chinese residents in Ghana.
He said at this time of the year, the Chinese mostly return to their home country for holidays.
Speaking in an interview on Tuesday, January 17, Dr Obeng explained that the situation would persist till the repatriation of the dollar is contained.
“Until we have a permanent solution to this repatriation and all that, for this particular month of January, it will continue to see the depreciation of the cedi,” he said.
The dollar has begun a steady appreciation over the cedi in the last few weeks, raising fears that the country is heading back to the dark days of 2022 when the cedi experienced a huge depreciation.
The GUTA president explained the reason for the demand in dollars which has caused the cedi to depreciate.
“When the masters of the economy are going for their vacation, we see the peak of the exchange rate, and this is what has happened this time round also. The Chinese are going for their vacation, mostly at that time, they take a chunk of our resources and leave the shores of the country and send our limited resources to their home countries,” he said on Joy News on January 17.
He added that “other masters of the economy are the expatriates – the people owning the economy in areas of banking, communication etc.”
The Bank of Ghana is today quoting the exchange rate at ¢10.30 to the dollar, but the rate is slightly higher in the commercial space, with some quoting ¢12.50.
But despite the rise, the Governor of the central bank, Dr Ernest Addison, is confident the worst days of the cedi are over.
According to him, the poor performance of the currency in 2022 will not repeat itself.
This, he said, can be made possible if the debt exchange programme is successful.
“Government has announced a debt standstill, and that debt standstill means that the outflows – the money used to service foreign debt will not go out anymore.
“That gives us a lot of room and takes pressure from the foreign exchange market. So because of that debt standstill, I can say that we should expect the currency to remain relatively stable.
“I can stick my neck out that we will not see the sort of things we saw in 2022 if everything works well,” he said.