The Ghana Cedi is expected to deteriorate further on the forex market as Dr. Mahamudu Bawumia and Dr. Addison wait for this year’s cocoa loan syndication.
The Ghana Cocoa Board, is expected to sign a US$1.3 billion cocoa loan syndication later this year. This amount is what the economists; Dr. Bawumia and Dr. Addison, are expecting to use stop any further depreciation of the cedi.
The Ghana cedi, has depreciated by almost 20 percent and it is now GH¢5 to US$1.
Flashback: during the 2016 general election, the then Vice Presidential Candidate, Dr. Bawumia, on one of the campaign platform said” if the economic fundamental are weak, the exchange rate would expose you”.
Importers that were promised a stable exchange rate by the New Patriotic Party, (NPP), now have to look for more cedis to exchange with the dollar before they can meet their import demands.
Since they don’t have any solution to end the fast depreciation of the cedi, the Bank of Ghana, has resulted to liquidate part of the reserves to support the cedi.
So far, the central bank has pumped in close to US$500 million on the forex market, just for August and September.
The situation may even get worse, as the country approaches Christmas celebration where festive demand could trigger a further depreciation of the cedi.
Already, currency experts that The Herald spoke to, say the cedi is likely to trade with the Dollar at GHc5.3, end year.
If this happens, it means the cost of goods and service in the country would be beyond affordability of most Ghanaians.
Other economists’ say, plans by the central bank to tighten the monetary policy further, is not the best solution for the cedi’s depreciation, as this would make the cost of credit rather expensive for businesses.