The Ghana Union of Traders’ Associations (GUTA) says the recent strengthening of the cedi is being partly driven by a sharp decline in demand for foreign currency among its members.
According to Charles Kusi Appiah, Head of GUTA’s Business and Economic Bureau, many traders are now shifting away from the dollar, opting instead to hold onto the cedi due to its unexpected resilience in recent weeks.
Mr. Appiah said the change reflects growing confidence in the local currency and a decreasing need for forex in international trade.
“When the cedi struggles, people turn to the dollar as a store of value,” he explained. “But now, the cedi is appreciating. So why hold forex when it’s losing value?”
He noted that in the past, traders would stock up on dollars even without an immediate need, simply to hedge their capital in uncertain times. But that’s changing.
“With the introduction of Gold4Oil and other gold-backed initiatives, most international transactions now use gold. That has reduced the need for forex,” he said.
Mr. Appiah revealed that some GUTA members are now questioning whether holding onto dollars makes financial sense.
“Someone called me today and asked, ‘What do I do with my forex holdings?’ And I said, liquidate if you don’t need it there are better investment options, like gold coins,” he advised.
He emphasized that the shift is not just based on sentiment, but real market behavior.
“Whenever forex outperforms the cedi, our working capital takes a hit. But with the tables turning, there’s less incentive to hold dollars—and that’s pushing demand down,” he added.
Mr. Appiah said that confidence in the cedi is now strong enough for it to be seen as a reliable store of value, a key factor driving the current market dynamics.
