Scramble for dollar at forex bureaus increase; panic, speculation worsen cedi depreciation

Information reaching Joy Business indicates large corporates that depend largely on dollars for transactions, particularly transfers overseas are scrambling for the US dollars, a situation, that is causing the rapid depreciation of the cedi.

Also, panic and uncertainty in the Ghanaian economy and speculation are contributing to the fast fall of the cedi which has not been seen since the early 90’s.

The government is presently negotiating with the International Monetary Fund (IMF) for an economic programme that will strengthen the country’s balance of payment to help address the imbalances in the Ghana economy.

But, it appears many Ghanaians are not optimistic about the economic challenges being addressed.

Speaking on condition of anonymity, a trader who imports goods from China told Joy Business that the commercial banks are also relying on the forex bureaus to undertake their foreign transactions.

“Corporate institutions that undertake forex transactions are not getting dollars to buy. They claim the banks don’t have forex to execute their transfers and payments for them, so their only hope is the forex bureaus or sometimes the black market”, he pointed out.

Again, he said “there is uncertainty and panic in the economy, so some people are looking to convert their cedis into dollars. It is not good and that has also been driving the huge demand. In fact, I have not seen this for a very long long time”, he mentioned.

An operator among the big four forex bureaus in Ghana [name withheld] also said the indifferent posture of managers of the economy is fuelling the fast depreciation of the cedi, adding “speculators have also taken advantage.

“Bro you see, the government is behaving as if nothing concerns them. People are always calling us if we have dollars because they claim they don’t trust the cedi. This is a contributing factor I must say”.

“The other thing is that we’re getting to the festive season and importers need dollars to import their goods to sell. Unfortunately, the corporate institutions are scrambling with them for the few dollars. It is sad”, he stated.

Using old strategies to address cedi depreciation not working – Vice President of Forex Bureau Association of Ghana

The Vice President of the Forex Bureau Association of Ghana, Dr. Alex Akpabli, has also expressed worry about the lack of innovation by the government to resolve the rapid depreciation of the cedi.

According to him, using the same old strategies to address the depreciation of the cedi is not working and therefore government must use another strategy.

“We have the parallel market that competes with us, the black market that is the challenge. If you need dollar come to us and we can help but if you choose black market which is not safe then there is a problem”, he mentioned.

Cedi traded at ¢14.50 on October 20, 2022

The cedi sold at ¢14.50 to the dollar yesterday evening [October 20, 2022], after it had traded at ¢13.75 in the morning of the same day.