Businesses and individuals that demand dollars for their operations are bemoaning the shortage of the foreign currency amid high demands pushing down the value of the local currency.
The cedi in the past few days on the forex market has begun depreciating throwing businesses dependent on forex into distress.
For instance, the cedi on the forex market yesterday traded at 14.80/14.98 to the dollar. At the start of trading for today Friday, January 17, the cedi rate has jumped to 14.92/15.05. As of midday on Friday, the rate stands at 14.98/15.18.
Industry players attribute this depreciating trend to the shortage of the dollar following the cessation of the intervention by the Bank of Ghana. The Central Bank has halted its large sale of dollars to the market leading to the scarcity of the currency.
Analysts attribute the stability enjoyed by the cedi to this large intervention by the Central Bank.
Forex Trader, Kodzo Letsa tells The High Street Journal that as of midday on Friday, some firms and individuals who badly needed the dollars were willing to buy at a higher bidding price of 15.08 cedi per dollar.
He says the imbalance has created a bullish environment for the dollar, putting pressure on the local currency.
“This aggressive ascent is a direct consequence of unwavering demand for the greenback, exacerbated by a prevailing USD shortage. Actual firm bids are currently anchored at 15.0200 levels, yet the absence of corresponding offers suggests a market eager to embrace the dollar’s dominance,” he told The High Street Journal.
He added, “I anticipate the pair to continue its upward trajectory throughout today’s session.”
Per the cedi depreciation trend over the years, the first quarter of the year is one of the periods the cedi takes a massive hit due to speculations and the repatriation of profits by foreign multinationals. Analysts fear the current developing trend could get worse if there is no significant intervention by the Bank of Ghana.
Should the trend continue, Ghanaians and businesses must brace themselves for exchange rate-induced inflation which can disrupt the budgets of both individuals and businesses.
