According to finance analyst and Head of Finance at Merban Capital, Nelson Cudjoe Kuagbedzi, the recent depreciation of the Ghana cedi is a normal market development and not necessarily a sign of economic instability.
Speaking on TV3’s Business Focus on Monday, August25, Mr Kuagbedzi said the currency fluctuations are to be expected and it reflects broader market forces.
“You don’t expect a currency to be stable for a long time,” he noted. “Some factors may let it appreciate or depreciate.”
He argued that allowing market forces to determine exchange rates requires a lighter intervention approach from the Bank of Ghana. “If you want the market to determine the true value of your currency, then it means the intervention of the Bank of Ghana must be reduced a bit,” he said.
Mr Kuagbedzi also dismissed fears of a dollar shortage in the banking sector. Citing recent discussions with commercial bank managers in Accra, he explained that supply is not the core issue but rather, procedural delays and documentation requirements for importers are affecting access.
“There is no real shortage of dollars,” he said. “The issue lies in the documentation importers must provide before being granted access to forex.”
Looking ahead, he expressed optimism that the central bank would inject more foreign currency into the system and scale back its footprint in the forex market.
“I believe the Bank of Ghana will show up with the dollars within the system and reduce its footprint in order to make the cedi appreciate before the end of the year,” he added.
His comments come amid growing scrutiny of the cedi’s performance, as analysts and policymakers weigh the balance between market stability and exchange rate realism.
