Dollar shortage has hit the forex market as the rate of depreciation of the Ghana cedi nears GH¢10 to one US dollar.
Checks with some banks and forex bureau by Joy Business indicate that whilst some banks are quoting ¢9.95 to the dollar, others are selling a dollar for ¢9.90.
However, the situation is worst at the forex bureaus as they are quoting between ¢9.97 and ¢10.5 to one American greenback.
As of Monday, August 15, 2022, the cedi had lost about ¢3.15 on the face value to the dollar since the beginning of the year.
Some Senior Relationship Managers and Treasurers that Joy Business spoke to confirmed the scarcity of the US dollar, adding, “the situation is bad and could get worse by the end of the week if the authorities including the Bank of Ghana do not intervene”.
They however pointed out that the best place to get the American currency is the ‘black market’, but at a higher rate of more than ¢10.
They claimed they’re not getting dollars from the Bank of Ghana via the spot market.
The Monetary Policy of the Bank of Ghana began an emergency meeting to find a remedy to the fast depreciating cedi and rising inflation.
However, some analysts and market watchers have argued that the situation is more of a weak fiscal economy, which has consequently affected the monetary and real sectors of the economy.
Others have also argued that the economy has been impacted by global and external developments such as Covid-19 and Russian/Ukraine war.
But the major issue is the rising debt stock which will hit over ¢400 billion by the end of September 2022, and the rising fiscal deficit as a result of low revenue and borrowings.
This year, the nation will spend about ¢42 billion to service its debt this year, with a sizeable amount going to foreign investors.
Even, a significant number of holders of Ghana’s bonds are non-resident investors who have been selling their holdings in the Government of Ghana securities.
BoG to take hard decision to reduce rate of depreciation of cedi
It is expected that the Bank of Ghana will take a very stern decision to address the rapid fall of the cedi.
The decision will come as a disincentive to consumers and businesses who will have to brace up for tougher decisions.
A source close to the Central Bank had cited previous examples of emergency foreign exchange measures which never stopped the cedi from further depreciation.
For now, the, the authorities must move fast an get a programme with the International Monetary Fund to reassure investors that Ghana is a safe haven in investing in financial instruments.
Cedi loses 33% value to dollar since January 2022
The cedi has since January 2022 lost about 33% since the beginning of the year.
According to Bloomberg, the cedi has lost 155% in value to the dollar since the redenomination of the local currency in 2007.