Cedi is 'down and very vulnerable but not worthless' - Gabby takes on media

Gabby Asare Otchere-Darko of the New Patriotic Party, NPP, is concerned about media reportage 'talking down' the fast depreciating Ghana Cedi.

His concern stems largely from depictions of the currency among others as 'worthless' as used by a local news outlet, TV3 in one of its bulletins of October 22, 2022.

Gabby holds that whenever journalists report negatively on

Read full articlethe cedi, they become accessories to fueling speculation about the currency and thus become complicit in its depreciation.

He wrote in a Facebook post of October 20 thus: "Journalists can report and influence. But where the default mode is to influence negatively, such media houses run the risk of becoming partners in speculation.

"It is not the job of journalists and analysts to fix the cedi; but fixing it is not helped if they make it more their job to fuel speculations.

"The cedi may be worth 60% less now than what it was to the US dollar last year. But it is not worthless! My sympathies go to the many, many businesses and consumers out there who simply do not know to where to turn," his post read in part.

His comments come a day after Finance Minister Ken Ofori-Atta appealed against panic and unnecessary rush to get the dollar. he, however, described the depreciation of the cedi as 'perplexing.'

Speaking to a journalist of Accra-based Asaase Radio from Washington where he is leading a team engaging the International Monetary Fund, IMF; he described the depreciation rate as ‘perplexing.’

“It is quite perplexing to see where it is going,” he said about the continued depreciation of the cedi.

He ascribed the thirst for dollars to the October season where people will be looking for dollars in order to undertake imports for Christmas. “Of course, typically in October, people are importing for Christmas and maybe there is a rush for that.

“The support we are getting from countries like Germany, France etc. we are confident that we will get the resources needed. So, we really would want people to know, not to panic or be rushing to put pressure on the currency. I think it is unnecessary and we are in good shape,” he added.

He said government was upbeat that a deal will be reached with the International Monetary Fund, IMF later this year to allow for disbursement of funds early 2023. “My expectation is that once we also conclude the fund, that would lead to the Fund’s disbursement early next year.”

State of the cedi

The Cedi has recently been classified by Bloomberg as the worst-performing currency against the US Dollar.

Currently, the Cedi is trading between GH₵13 – 15 cedis to a dollar at some forex bureaus. The depreciation rate was a contributory factor that triggered shop closures ordered by the Ghana Union of Traders Association (GUTA).

According to the group, the fast depreciation of the Cedi is eroding their profits and also increasing the cost of doing business.

Read Gabby's full post:

This is the headline of a major television station in Ghana - TV3. Even as reputable analysts, such as JP Morgan, are today describing the cedi in a mixed tone as at least “15% undervalued” and its net risk as “positive”, but our forex market “distorted”, a big Ghanaian media house is busily and loudly describing the cedi as “worthless.”

Journalists can report and influence. But where the default mode is to influence negatively, such media houses run the risk of becoming partners in speculation.

It is not the job of journalists and analysts to fix the cedi; but fixing it is not helped if they make it more their job to fuel speculations.

The cedi may be worth 60% less now than what it was to the US dollar last year. But it is not worthless! My sympathies go to the many, many businesses and consumers out there who simply do not know to where to turn.

There is hope because there is every indication that the new injection of more forex, should reduce the influence of black market operators on rates, giving the local currency a necessary relief from next week.