4 Reasons For Depreciation Of The Cedi

The Ghanaian currency, the Cedi has depreciated woefully within the past 7 months exceeding the ten margin with over 70 pesewas as at 8th of October 2022.

The development has triggered discomfort amongst investors and business owners in the country, inflation is on the surge and prices of goods aren't spared, public sector workers have been cushioned by the government with a 15% pay rise till December, a move that was commended by many.

With the big blow on the Cedi, the vice president, Dr. Mahamudu Bawumia is expected to address the media on possible ways to arrest the ailing Cedi.

Whilst we wait for the vice president, these are four reasons the currency is Depreciating at a fast pace.

1. Some Universities and Hotels may be charging fees in dollars and other foreign currencies. See Ghanaian hotels such as the five star hotels for some foreigners may be charging in dollars to be on a safer side in order not to lose their investments.

Such a move will trigger a depreciation in the Cedi because some hotels charge as much as $1000 per night. Also universities may be charging foreign students and others in dollars or euros, this can be done mostly in private universities in order to secure their investments.

2.Too much foreign trips: lots of Ghanaian lately have resorted to travelling to foreign countries for holidays, they need lots of foreign exchange to travel and spend, this can trigger the demand for foreign currencies. Also some embassies rejecting visa applications may trigger people to lose so much foreign currencies.

3. Frustation of local businesses with taxing: several local businesses have collapsed and as a result people have resorted to importation through some mobile applications to start foreign retail businesses, the collapse of local businesses has brought pressure on the Cedi because more people have resorted to importing.

4. Some foreign banks may be sending their monies away, it's most likely some Banks and businesses in the country are shipping or airlifting their capital away through various means possible, they will need to convert their capital or profits into a stable currency such as the dollars, this can worsen the cedi's stability, I'm yours truly, Tuorimuo Elvis Philip.

Let's address this issue of depreciation once and for all because if not for the re denomination, 1 dollar would have been Ghc107,100. The Bank of Ghana has arrested some illegal forex traders in Accra, the are from Neighboring countries such as Burkina Faso, Mali, Niger and Chad.