Director of the Institute of Statistical, Social and Economic Research (ISSER), Prof Peter Quartey, has indicated that the main cause of the depreciation of the Ghana Cedi is speculation by Ghanaians.
According to him, speculations that the Cedi will further depreciate against the major currencies encourage people to buy more foreign currencies, which causes the value of the cedi to fall further.
In an interview on Asaase Radio interview monitored by GhanaWeb, Prof Quartey said, “to arrest the depreciation of the Cedi, you have to know what causes it.”
“… one thing I find very striking, and I think it has to do with us Ghanaians, is the issue of speculation. There are a lot of speculative activities. Once we start making noise about the exchange rate, it gets to a point you don’t even hear the media talk about the exchange rate, then it gets to a time they talk about it every second, every minute.
“Once I hear that really, then quickly whatever I have let me go and exchange and it is really happening, those who do not even intend to import now might import soon. Of course, they are taking rational decisions, so that is not helping us,” he said.
“… in the 1st quarter of every year, you have multinationals repatriating their profits. So, there is pressure on the foreign currency. Then you have the Chinese New Year where most Chinese will like to go back home and therefore exchange whatever they are holding into a foreign currency,” he added
On measures to curb the depreciation of the Cedi, the director of ISSER said that the speculative activities must be reduced.
He added that the government should put in measures to ensure that the foreign investors cannot repatriate all their profit but also invest in Ghana’s economy.
The Ghana Cedi has since January 2022 depreciated by 14.21 per cent, from GH¢6.05 to GH¢GH¢7.02 and has been adjudged the worse performing currency in Africa.