The CEO of Ghana Association of Banks, John Awuah, has revealed that a significant portion of the cedi\u2019s past depreciation was driven not by real economic fundamentals but by calculated profiteering.<\/p>\n
Speaking on Joy News\u2019\u00a0PM Express Business Edition<\/em>\u00a0on Thursday, May 29, Awuah described a worrying trend of currency manipulation that he said accounted for as much as 30 per cent of the cedi\u2019s past falls.<\/p>\n \u201cI once stated with no proper research behind it that I could clearly read that the extent of speculation in the currency movement was between 20 and 30%,\u201d he said.<\/p>\n \u201cSo if there was a depreciation, about 20 to 30% of that depreciation is not backed by any effective transaction, but people who are just playing on the currency for temporary price adjustments to profit from the currency movement.\u201d<\/p>\n According to Mr Awuah, these speculative players were not responding to trade imbalances or macroeconomic shocks. They were simply gaming the market for short-term gains.<\/p>\n \u201cIf currency is able to hold its own, what you are doing is making that trade unattractive,\u201d he said.<\/p>\n \u201cNow, the cedi is more attractive. So the people who are holding cedi, they are looking for cedi investments, because the currency is not depreciating as aggressively as we are used to in the past.\u201d<\/p>\n He was quick to caution, however, that appreciation should not be mistaken for stability. For businesses, what matters is not necessarily a stronger cedi, but a stable and predictable one.<\/p>\n \u201cWe should not be too excited about significant appreciation,\u201d he warned. \u201cThat is not exactly what the business community is looking for.\u201d<\/p>\n He explained that wild swings in the currency\u2019s value\u2014whether positive or negative\u2014make it impossible for businesses to plan effectively.<\/p>\n \u201cThe business community is looking at predictability. Not that the currency has depreciated to \u00a25 to the dollar, and tomorrow it is \u00a210. Another time it is \u00a29.\u201d<\/p>\n Inconsistent currency movements hurt forecasting, banking, and investment decisions, he said.<\/p>\n \u201cYou need to plan effectively. You need some variables to hold their own and not be oscillating significantly beyond levels that you are unable to predict and have a proper forecast,\u201d Mr Awuah explained.<\/p>\n \u201cEven if you are talking to your banks, your ability to project your revenue generation is hampered if a component of your revenue is foreign currency-based.\u201d<\/p>\n While Awuah expressed some confidence in the current performance of the cedi, he avoided making bold projections.<\/p>\n \u201cI don\u2019t want to say a wait and see, because I don\u2019t have any reason to doubt the ability of the currency to hold its own. Coming down to single digits, I am not sure,\u201d he said.<\/p>\n","protected":false},"excerpt":{"rendered":" The CEO of Ghana Association of Banks, John Awuah, has revealed that a significant portion of the cedi\u2019s past depreciation was driven not by real economic fundamentals but by calculated profiteering. Speaking on Joy News\u2019\u00a0PM Express Business Edition\u00a0on Thursday, May 29, Awuah described a worrying trend of currency manipulation that he said accounted for as […]<\/p>\n","protected":false},"author":123457,"featured_media":11245,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"footnotes":""},"categories":[3525,41],"tags":[3598,2831],"class_list":["post-11244","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economy","category-general-news","tag-ceo-of-ghana-association-of-banks","tag-john-awuah"],"_links":{"self":[{"href":"https:\/\/www.fishfmonline.com\/index.php?rest_route=\/wp\/v2\/posts\/11244","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.fishfmonline.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.fishfmonline.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.fishfmonline.com\/index.php?rest_route=\/wp\/v2\/users\/123457"}],"replies":[{"embeddable":true,"href":"https:\/\/www.fishfmonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=11244"}],"version-history":[{"count":1,"href":"https:\/\/www.fishfmonline.com\/index.php?rest_route=\/wp\/v2\/posts\/11244\/revisions"}],"predecessor-version":[{"id":11246,"href":"https:\/\/www.fishfmonline.com\/index.php?rest_route=\/wp\/v2\/posts\/11244\/revisions\/11246"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.fishfmonline.com\/index.php?rest_route=\/wp\/v2\/media\/11245"}],"wp:attachment":[{"href":"https:\/\/www.fishfmonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=11244"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.fishfmonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=11244"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.fishfmonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=11244"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}