The confidence in the cedi is beginning to manifest because of the drastic measures intituted by the Bank of Ghana. Jessica Acheampong reports on the new trend.
Measures being put in place by the Bank of Ghana to halt the dwindling fortunes of the Cedi appear to be making headway as the local currency has stabilised significantly against the dollar and other foreign currencies in the last month, the Managing Director of Barclays Bank, Ghana, Mr Benjamin Dabrah, has confirmed.
�I think it has improved significantly over the last month, the rates have stabilised significantly and that shows that some of the steps that the central bank has taken are having effect,� Mr Dabrah told the Graphic Business in an interview.
According to the Merban Stockbrokers Ltd (MSL) The Cedi bounced back against the South African Rand as the close of business on Thursday August 23 but failed to hold its own against the United States dollar, the Euro, Pound, and the Swiss Franc.
Reviewing the activities of the curreny market, the report said the cedi was down 0.84 per cent and 0.71 per cent against the Euro and the Pound with indicative rates on the interbank market inching up to GH�2.42 and GH�3.06 against the Euro and the Pound.
The Cedi also shaved 0.02 per cent and 0.83 per cent against the United States dollar and the Swiss Franc with mid-rates on the interbank market for the greenback and the Swiss Franc closing at GH�1.93 and GH�2.02 respectively.
Against the South African Rand, the Cedi clawed back 23.63 per cent with average rates on the interbank market reading GH�0.23.
Since July 30, the United States dollar has remained at GH�1.92 while the British pound sterling stood at GH�3.01, according to the Ghana Bankers Association.
According to Mr Dabrah the cedi has not depreciated by more than one per cent in the last month adding �yes I can see that to the extent that we continue to take the necessary measures to protect the cedi we would have some more stability going forward.�
The central bank in a bid to make the local currency more attractive and reduce demand for foreign currency, particularly the dollar, deliberately relented on the release of dollars to banks, a situation which caused a lot of inconvenience for bank customers and traders in particular.
Mr Dabrah said �it is a bit uncomfortable and inconvenient for customers when they do not get the dollar but I believe that what should be the predominant legal tender in this country should be the Cedi and not the dollar,�
He added that Ghana is a Cedi economy and anything done to make sure the Cedi remains the predominant legal tender is a good thing, something which he said the current situation was promoting.
Contrary to earlier speculations of dollar cash shortage in the system, Mr Dabrah explained that nothing of that sort was happening. �If you go to the United States you would not find cedi cash, it�s natural that when you go to the economy of another country, you won�t find as much cash of a legal tender that is not the legal tender of that country,� he said.
According to him, there is absolutely nothing unusual about it and rather called for efforts to stop over dollarisation of the economy. �There is no reason why nursery school fees are priced in dollars in Ghana, absolutely no reason, it�s not justified and I think we should get back to pricing commodities in Ghana Cedi,� he said.
He also debunked perceptions that banks were refusing to give dollar cash to their customers explaining �we are not refusing to give dollar cash, we give dollar cash when we have dollar cash, the reality is that there is not as much dollar cash in the system as it used to be.�
He also told the Graphic Business all circulation of dollars into the system was controlled by the central bank adding �you go to the central bank, sometimes they are able to give you everything you need, and sometimes they are not able to.�
That notwithstanding, the bank has measures put in place to help clients when it does not have enough dollar cash to meet their demands. Mr Dabrah said �when we do not have dollar cash we try and understand what clients need the dollar cash for and there are alternative ways of meeting their need.�
He said when people are travelling, the bank gives them dollar denominated cards which they can use to withdraw dollar cash from ATMs and Point of Sales abroad, implying there are other ways of giving people their money without necessarily counting cash into their hands.
Source: Daily Guide
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