Businesses are calling on the relevant authorities to address the rapid depreciation of the local currency against major currencies.
Owners of some forex bureaux have called on government to deal with the situation which is affecting their businesses.
The cedi has reached GH¢4.85 to $1.
The drop is affecting importers who have to issue more cedis for the dollar and other major trading currencies.
Checks show that most of the banks are exchanging one dollar for GH¢4.82 and GH¢4.85, which is a loss of ¢0.07 in value.
“When the cedi depreciates like this, people decide to hold onto their dollars so business slows down, but when the cedi appreciates people find no reason to continue holding their dollars so they let go.
“People are saying there is nothing going on in town so the dollar is scarce. Although there’s demand for the dollar we don’t have any to sell to the customers and the banks also don’t supply it to us,” one of the owners of a forex bureau said.
Some of the banks have explained that the development is due to most foreign investors trying to get out of the local bond market as a result of higher returns in the US market.
According to sources, some of the investors are not bringing in the required dollars due to concerns with the interest on long-term bonds, as well as the outlook.
Other banks have also said the Central Bank is not releasing enough dollars into the system to meet their demands which has contributed to the depreciation of the cedi.
They maintained that the situation would not have gotten worse if the regulator had intervened earlier.
Yet again, another school of thought claims the cedi is overvalued and some level of depreciation is required to get it right levels.
They argued that if the challenge is not contained very soon to prevent further depreciation, it would be devastating for the country’s economy.
But the Head of Finance Marketing at the Bank of Ghana (BoG) Treasury, Stephen Opata disagrees, arguing they have increased the dollar on the market.
“I am expecting that we will soon have a stable currency as we have experienced for most of the first quarter and this conversation will be a thing of the past,” he said.
Meanwhile, businesses fear the impact of a sustained depreciation of the local currency will soon tell on prices of goods and services, especially fuel prices, mortgage, food items and spare parts.
They say the development could also force BoG to hike interest rates to help minimise its impact on inflation.
– Myjoyonline