The Chief Executive Officer of Dalex Finance Ken Thompson has reiterated calls to allow demand and supply to determine the strength of cedi until it reaches it equilibrium.
According to him, government will have a better appreciation of the real strength of the cedi if it is allowed to fall to its normal level. I
n addition, Mr. Thompson argued that government will have ample time to invest in productive sectors of the economy to improve the cedi’s worth. “I am not exactly sure why we struggle with cedi depreciation. The cedi will always depreciate; it is the rate at which it depreciates. It is a supply and demand [situation],” he said.
According to him, the volatility of the cedi will continue to linger on so far as the country tends to import more than it exports.
“There is more demand than supply so it is going to depreciate. Also, you can’t expect to import everything, export very little and have a stable currency. That doesn’t happen.” he added.
The cedi has seen a sharp decline since the beginning of the year with it depreciating by about 5.4 % on the interbank forex exchange market and 6.72% in the same period across forex bureaus in the country.
In the same period a year ago the cedi performed better in forex bureaus across the country depreciating by only 2.5 percent.
Mr. Thompson said government can fix the depreciation issues by investing in the productive sectors such as the Agriculture to increase the country’s export market.
“As far as I’m concerned, let’s allow the cedi to depreciate and I truly believe that the true value of the cedi now is between 5 to 5.5 cedi to a dollar. Let’s allow it to depreciate and let’s invest in Agriculture so that we can increase our export.”
He warned that the situation will not get better with the indulgence of the Central Bank, stating that government can only deal with the Cedi issue if the right productive sectors are invested in.
“Any attempt by the central bank to intervene will fail because it’s a supply and demand issue. Allow it to depreciate and then we deal with the consequences,” he stated.
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