A professor of Finance at the University of Ghana, Prof Godfred Bokpin, has assured the public that recent pressures on the cedi should not trigger panic, describing the currency’s dip as part of a natural correction process.
Speaking in an interview on Joy FM‘s Top Story on Thursday, September 4, Prof Bokpin explained that businesses have recently faced challenges accessing foreign exchange to meet import demands, particularly ahead of the Christmas season when demand for dollars typically surges.
“There was pressure on the currency, and people’s businesses were having challenges getting the desired foreign exchange to meet their imports and the rest of them, and also ahead of Christmas and all of that, there will be an uptick in all of this. So what we are seeing now, [Cedi depreciation] should also not create panic. It doesn’t mean that the central bank has lost control. I think they’ve done quite well,” he stated.
He noted that while the cedi’s earlier appreciation was difficult to sustain, the current reversal should be expected.
He added that the upcoming fifth review of Ghana’s International Monetary Fund-supported programme, likely to take place at the end of September or early October, will be another important milestone for currency stability.
According to him, the central bank’s strong presence in the market, coupled with improved understanding of foreign exchange operations, provides confidence that the current pressure will be managed effectively.
“To some extent, this is also good for us, because where the exchange rate had appreciated to, it was always going to be difficult to sustain,” Prof Bokpin observed.