GUTA’s call to trade in Chinese Yuan not in the right direction – GITFiC
The Ghana International Trade & Finance Conference (GITFiC) has indicated that the call by GUTA for the government to fast-track plans to allow trading in the Chinese Yuan instead of the US dollars is not in the right direction.
President of the Ghana Union of Traders (GUTA), Dr. Joseph Obeng, called for the fast-tracking of measures to ensure that Ghanaian traders are able to trade more in the Chinese Yuan when doing business with China.
He noted that the move is expected to reduce pressure on the Cedi because imports will not be done with US dollars.
Ghana’s imports is mostly coming from China because of cheaper costs when compared to similar local goods.
Making the assertion in an interview, he said, “even the central bank has accepted the move of trading with China using the Yuan.”
“They are talking around that. Some banks have that initiative across, so it is the sure way to go,” Dr. Obeng added.
However in a statement issued by GITFiC on Thursday, March 10, it noted that, “such a call is not in the right direction, it lacks merit, and it is without any economic-scientific basis”.
“We believe what GUTA meant, in the Economic and International Trade sense, was a Bilateral Swap Agreement (BSA),” it guessed.
“However, this call, at this particular period, is not feasible and cannot apply to Ghana. The time for cheap talks should be shelved.”
GITFiC cited how a bilateral currency swap agreement between China and South Africa yielded no results as the US dollar eventually reigned supreme.
“Egypt has also tried the same and it has amounted to nothing. The issue of the US dollar goes beyond just import and export.”
Dr. Obeng indicated that Ghana could explore a clearing system with China similar to the Pan-African Payment and Settlement System.
“We can also do a similar clearing system with China where we send our local currency to the local banks, and they have a clearing system with the Chinese banks where they clear with the local currencies.”
“I think this is the way forward, and central banks in Africa have started thinking in that manner. I think they have to fast track those initiatives that will lessen the pressure on the US dollar,” Dr. Obeng said.
GITFiC insists that the Bank of Ghana should ignore the “noise”, describing it as “baseless, uninformed, unscientific, and a mere talk-talk”.
“The Chinese Yuan is already trading on the Ghanaian Forex space,” it observed. “Traders can buy the Yuan with cedis and proceed to trade in China and vice versa.”
“We call on all well-meaning Ghanaian citizens and the entire business community to trust in Ghana’s current Economic Management Team (EMT).
“Their abilities and capabilities are solid and are very much able to handle the down-turn of the US dollar-GHS and bring it back to its past glory in the coming months. It will get worse before it gets better,” it added.
