Past cedi falls were manipulated for gain – John Awuah reveals

The Chief Executive Officer of the Ghana Association of Banks, John Awuah, has revealed that a significant portion of the cedi’s past depreciation was not driven by economic fundamentals, but by speculative profiteering.

Speaking in an interview, Mr Awuah pointed to currency manipulation as a major factor behind the cedi’s volatility, estimating that as much as 30% of past depreciation was caused by traders exploiting the market for short-term gains.

“I once stated, even without detailed research, that 20 to 30% of the cedi’s movement had nothing to do with real economic activity, but with speculation and profit-seeking, people were simply playing the currency to benefit from price swings,” he said.

These speculative actions, he noted, were unrelated to trade deficits or macroeconomic shocks.

Instead, they were driven by opportunists taking advantage of temporary market imbalances.

However, Awuah noted a shift in recent months, saying the cedi has become a more attractive currency to hold, thanks to its improved performance.

But he was quick to add that appreciation alone is not the goal.

“We shouldn’t be overly excited about the cedi appreciating, what businesses truly need is a stable and predictable currency, not wild fluctuations,” he warned.

He stressed that both sharp gains and sudden losses in the cedi’s value make it difficult for businesses to plan, budget, or project revenues especially when earnings involve foreign currencies.

“Inconsistent currency movements affect investment decisions, banking, and forecasting, if you’re negotiating with banks or projecting future earnings, unpredictability becomes a major obstacle,” Mr Awuah explained.