The CEO of the Ghana Association of Banks, John Awuah, has cautioned the general public against purchasing dollars for storage when there is no immediate need for them.
Speaking in an interview, he said that people often seek dollars in anticipation of significant depreciation of the cedi.
However, this behaviour exerts undue pressure on the local currency, worsening its depreciation.
“We need to have some confidence in the local currency and not put too much pressure on it by demanding dollars when we don’t need them now, particularly people like you and I, who quickly buy dollars to hedge against currency depreciation as soon as we are paid. This practice exerts too much pressure on the currency and harms the economy,” he said.
The Bank of Ghana has assured that they can rein in the cedi depreciation, Mr Awuah said, reminding the public of early 2023 when the currency value fluctuated significantly but eventually stabilised.
“We believe that speculative activities contribute to about 30% of the demand for dollars currently,” the CEO of the Ghana Association of Banks indicated.
He stated that people should avoid speculating on further depreciation of the cedi because they could suffer significant losses.
“The Central Bank has said they have the resources to manage currency movement, meaning they can aggressively intervene, causing rates to tumble and people to lose money. Speculators should be cautious and not place too much hope on currency depreciation,” Mr Awuah noted.
“If the Central Bank intervenes as they have indicated, speculators could face significant losses. We’re also providing education based on research, which is very interesting,” he added.
