Restrict ordinary Ghanaians from buying dollars on FX market – Prof Baah-Boateng advises BoG
Professor William Baah-Boateng, Head of the Department of Economics at the University of Ghana, has advised the Central Bank to issue directives to banks and forex bureaus that restrict ordinary Ghanaians from buying dollars.
Professor Baah-Boateng is of the view that, the indiscriminate buying of dollars on the foreign exchange market by Ghanaians who do not need the dollars for any form of transaction is partly responsible for the poor performance of the cedi against the dollar since the beginning of the year.
According to him, the dollar is not a medium of exchange in Ghana, hence, it should not be made readily available to any Ghanaian who wants to buy it.
“And that is what it’s supposed to be because the dollar is not a medium of exchange in Ghana. People keep dollars as a store of value.
“And therefore if Bank of Ghana is able to strengthen that part and say that if you don’t have any dollar account, you don’t have anything about dollars and then you have your cedis and say I want to change my cedis into dollar when we know that you’re not an importer, when we know that you’re not travelling, when we know that you’re not using it to pay fees, Central Bank should not allow that,” he remarked speaking on Joy News’ PM Express on Thursday.
Speaking further in the interview, Professor Baah-Boateng also stressed the need for forex bureaus to demand some form of identification from persons who come to buy dollars.
“And I think they can also go further as we have always said that going forward, the Central Bank should also make sure that people will not just walk into forex bureau and just change money as it were.
“They need to identify themselves with the Ghana card, with their passport, and that is the regulation that we talked about so that we don’t allow the market forces to determine anything as we have in the tomato market,” he said.
Cedi regains 33% of lost value to dollar in 2 weeks
Meanwhile, the local currency (cedi), within a span of 14 days has regained over 33% of its lost value to the dollar.
This is after the cedi recorded a depreciation rate of close to 60% against the dollar in the latter days of the month of November 2022.
The fast appreciation of the cedi against the dollar, has made the local currency the best performing currency against the American greenback.
According to Bloomberg, the cedi as at Wednesday evening was trading at GHS 10 to $1.
The strengthening of the cedi against its anchor currency – dollar – begun on December 1, 2022 when the IMF Mission Staff led Stephane Roudet arrived in the country to continue discussions on reaching a Staff-Level Agreement (SLA).
It continued its resurgence when the country’s Finance Chief, Ken Ofori-Atta, announced the government’s Domestic Debt Exchange Programme (DDEP) on December 5, 2022, indicating government’s willingness to restore the country’s debts to a sustainable level.
A Staff-Level Agreement (SLA) reached on Monday, December 12, 2022, further strengthened the cedi’s resurgence against the greenback, aiding the cedi to regain 33% of its lost value.
Aside the SLA being a factor to the cedi’s resurgence against the dollar, some experts have also attributed the strong appreciation of the cedi against the dollar to US Fed monetary policy easing and investors turning bearish on the dollar for the first time since July 2021, as possible factors fueling the dollar’s continuous depreciation against the Cedi.
