The President of the Ghana Union of Traders Associations (GUTA), Dr. Joseph Obeng has predicted that the cedi will depreciate further till the end of January.
With only 18 days into the year, the cedi has depreciated by about 12.7% to the US dollar which places the local currency as the second weakest currency among 15 top currencies in Sub-Saharan Africa.
Reacting to the development, Dr. Obeng blamed the cedi depreciation on the repatriation of the dollar to China by Chinese resident in Ghana.
He told Joy News that during the first month of the year, Chinese return to their home country for holidays and thus go along with huge amounts of dollars.
“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.
“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.”
The Bank of Ghana Wednesday quoted 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 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,” he stated.“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.
Meanwhile the local currency is being sold at about ¢13.10 pesewas to the dollar on the forex or retail market.
The British pound is selling at about ¢15 and ¢13.70 to the euro.