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A cross-section of Ghanaian traders who are hoping to do brisk business during the Christmas period has expressed worry about the value of the local currency against the US Dollar.

They noted that the weak Ghana Cedi, which is currently trading between GH˘1.63 and GH˘1.64 against the U.S dollar, was pushing the price of items up.

The Ghana Cedi, which is pegged to the US dollar, was anticipated to end the year at GH˘1.55 but has now declined to almost GH˘1.64 on the interbank market.

A visit by City Business Guide to some market centers in Accra revealed that business was slow ahead of the yuletide.

Maame Ama Adutwum, who sells textiles, ladies bags and Kente clothing at Okashie, Accra told this reporter that people are not buying because the prices of items are expensive than last year…They are also saying that there is no money in their pockets but we hope things will improve soon.

“At this time of the year people troop in from all corners to buy our things but this is not happening this time around,” Malik Abdualia, a shoe dealer at the Katamanto market noted.

“Government must pump more money into the system to improve liquidity while ensuring that the cedi does not devalue against the US dollar.

Anytime the cedi depreciates against the dollar, importers require additional capital to bring import goods, which increases the cost which is passed onto consumers. Consequently, the price of goods go up on the market.

Grace Amoah, who sells biscuits at Makola No. 1 market center, also urged the government to pay workers on time together, including their bonuses to keep the local currency strong. She told this paper that she hopes to make profit at the end of the Christmas festivities.

The Cedi’s value against the dollar touched its worst level since the redenomination exercise in October 2011 to 64 percent.

This forced the Central Bank to sell more millions of dollars to avert its fall. However, analysts expect that a five-year 200 million cedi bond auction held yesterday would push the cedi up further if demand for the issue is strong.

Christopher Nettey of Standard Bank said “we have seen the cedi post marginal gains, but there has not been much activity on the market compared to the last three days.”

The cedi has come under immense pressure in recent months due to high global demand for U.S. dollars. The currency posted a new all time low at the close of November 2011.
Source: Charles Nixon Yeboah

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