Foster Oteng Amoh, an economist and tax expert at Nkoranza Senior High School has attributed the current depreciation of the cedi to import sentiment by the government and citizens.
Addressing the challenges of the Ghana cedi depreciation, Oteng Amoh noted that many individuals have stockpiled dollars, anticipating a rise in its value in the coming days to trade for profit.
Speaking on Fabea FM's "Me Man Ho Dadwen" with Apiah-Kubi on May 29, 2024, the economist stated, "We have gone past the structural issues that would normally affect the balance of payment crisis we had; the situation is a self-fulfilling crisis since most individuals holding dollars are not ready to trade."
He added that the dollars in circulation are more than the Bank of Ghana's reserves, indicating that people are hoarding dollars as assets rather than releasing them for trade.
Additionally, the academic blamed the cedi's depreciation on the government's mismanagement of the economy, saying that some officials benefit from importing goods into the country.
Oteng Amoh concluded that the government's actions and management of the cedi have continued to fuel steep depreciation with no end in sight.
Some reports also revealed that the cedi had depreciated by 14.6% in May, 2024.
Companies in manufacturing, commerce and other sectors said the persistent depreciation of the Ghana cedi against major international currencies, especially the US dollar, must be checked immediately because it was slowing their businesses and pushing a lot of cost on the consumer who must pay higher for products whether essential or luxury.
The Ghana Union Traders Association (GUTA) and the Chamber of Automobile Dealership Ghana (CADEG) said the depreciating cedi had pushed the cost of goods and services to rise, making it difficult for businesses to stay afloat.
The Ghana cedi has depreciated by about 14.6% to the US dollar as of May 2024, the Bank of Ghana has revealed.
This is lower than the about 20% loss in value to the American greenback on the retail market.
According to the Central Bank’s May 2024 Summary of Financial and Economic Data, the cedi lost 7.7% in value to the dollar in March 2024 and depreciated by 10.5% against the dollar in April 2024.
Whilst it is going for GH¢15 on average against the dollar on the retail market, the Bank of Ghana is quoting a dollar to GH¢13.01.
Against the pound, the cedi has so far depreciated by 14.5%. It is trading at GH¢17.70.
It has also lost 12.9% in value to the euro. It is selling at GH¢15.07.
Meanwhile, the depreciation pressures on the cedi have slowed down as a result of improved foreign exchange (FX) liquidity, particularly the US dollar.
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