The Ghanaian Cedi has recently surpassed the GH¢16 mark against the US Dollar on the currency retail market.
A survey by Citi Business News at various forex bureaux and banks in Accra found that the dollar is being sold at rates ranging from GH¢15.95 to GH¢16.20.
This development comes on the heels of the International Monetary Fund (IMF) lifting restrictions on dollar auctions by the Bank of Ghana. This move follows a notable increase in the country’s reserves under a US$3 billion economic recovery program.
The Bank of Ghana’s July 2024 Summary of Financial and Economic Data indicates that the Cedi depreciated by approximately 19.6% against the US Dollar on the interbank forex market as of July 2024.
This rate of depreciation is slightly less than the 21% decline observed in the retail market.
During visits to several forex bureaux in Accra, operators attributed the current situation to the economic climate and the Bank of Ghana’s recent directive requiring Ghana cards as proof of identification for transactions.
Forex bureau operator Bernice Arthur explained, “Things are tough right now. When customers come, they often ask us to reduce the rates. If we do that, it impacts our business. We have to negotiate, and sometimes customers leave. However, we also have to lower the rates occasionally to stay in business.”
Another operator, Edward Lawson, pointed out that the slow pace of business is partly due to the hoarding of foreign currencies, as people anticipate higher rates in the future.
“Business has become slow because some are waiting for the dollar to rise before they come and change, which is very bad.”
Economic and Fixed Income Analyst Wilson Zilevu identified market sentiment as a key factor driving the high exchange rates.
“Speculative behaviour of foreign exchange dealers is all churning out today. Recently, the central bank also organized a seven-day option for foreign exchange dealers where they can lock in their prices.”
He urged the Bank of Ghana (BoG) to reassure industry players about the supply of forex in the market.
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