In a revealing assessment of Ghana’s currency volatility, the CEO of the Ghana Association of Banks, John Awuah, has pointed fingers at currency speculators for significantly undermining the value of the cedi in the past, describing their influence as a key driver of artificial depreciation.
Speaking on Joy News’ PM Express Business Edition on Thursday, May 29, Awuah stated that as much as 30% of the cedi’s previous declines were due not to genuine economic pressures, but to deliberate market manipulation.
“About 20 to 30% of the depreciation is not backed by real economic activity,” he said, citing speculative trading aimed at short-term profits. “People were just playing on the currency to profit from temporary price adjustments.”
His comments shed light on longstanding concerns about Ghana’s foreign exchange market, where fluctuations often outpace what trade imbalances or fiscal trends would justify. According to Awuah, such volatility discourages real economic planning and investment.
“If a currency holds its ground, it discourages speculative trade,” he explained. “The current cedi performance has shifted investor focus to cedi-denominated assets because the rate of depreciation has slowed.”
But Awuah was quick to caution against over-celebrating the recent stability or gains. He warned that businesses value predictability over dramatic currency swings—whether appreciation or depreciation.
“What the business community wants is not necessarily a stronger cedi, but a stable one,” he said. “Wild swings make forecasting, budgeting, and even banking extremely difficult.”
Awuah emphasized that inconsistent currency behavior disrupts revenue projections, particularly for companies that earn or borrow in foreign currencies. This, he argued, hampers long-term business confidence and economic planning.
While expressing cautious optimism about the current resilience of the cedi, the banking chief stopped short of making bold forecasts, especially about a potential return to single-digit exchange rates.
“I don’t want to call it a wait-and-see approach, but I’m also not sure we’ll be back in single digits soon,” he admitted.
His remarks have reignited calls for tighter regulatory oversight of Ghana’s forex market and better mechanisms to counter speculative attacks—issues central to restoring confidence in the local currency and shielding the economy from unnecessary shocks.
