The Chief Executive Officer of Dalex Financial Services, Ken Thompson is predicting that the cedi will continue to fall against major trading currencies unless there is a deliberate\u00a0effort to change the economy’s import dependency.<\/p>\n
Ken Thompson said Ghana’s “alcoholic economy” has allowed the\u00a0demand for the US dollar to outstrip supply hence the free fall of the cedi.<\/p>\n
\u201cGhana has an alcoholic economy\u2026 We are addicted to foreign goods and services. Because of that addiction, there is a huge demand for dollars. The demand for dollars is higher than the supply so consequently the cedi\u2019s fall,\u201d he explained.<\/p>\n
[contextly_sidebar id=”Tf7HZKYrguJmAyE8Zk9wfMzXz4NlWSlf”]Pressure has been mounting on the Ministry of Finance and the Bank of Ghana to halt the free fall of the currency\u00a0after it depreciated by about 40% against the dollar in 2014.<\/p>\n
Export more!<\/strong><\/p>\n Speaking on the Citi Breakfast Show<\/strong> on Thursday, Ken Thompson insisted that the only way the cedi could be saved will be to export more products instead of importing.<\/p>\n \u201cWe\u2019ve been there several times; we went to the IMF, we had operation feed yourself, we had HIPC and we are back to the IMF. So for me the cedi falling is a simple demand and supply issue. \u00a0What we have to do is to increase our supply of dollars and that will solve the problem. The only way to solve that is to export more. We have to export!\u201d he stressed.<\/p>\n Predictions and IMF targets<\/strong><\/p>\n \u201cIn February this year… I said the cedi was going to completely fall, and I said the IMF target will be missed and reading between the lines, it looks like the target has been missed.\u201d<\/p>\n “What I\u2019m hoping for is that, the Ministry of Finance will be able to negotiate with the IMF team so that it will release the tranche of dollars that was expected. In addition, that will also help to release donor funding\u2026 then they will bring in dollars.”<\/p>\n The banker further emphasized that, \u201cthe cedi will continue to decline unless we change the demand and supply situation.\u201d<\/p>\n The Bank of Ghana thus issued some directives to halt the free fall of the cedi but yielded little or no results.<\/p>\n Bank of Ghana sued<\/strong><\/p>\n A private legal practitioner, Dr John Ephraim Baiden dragged the Bank of Ghana to court over the cedi\u2019s woes praying the court to compel the nation\u2019s Apex bank to reverse the trend.<\/p>\n The cedi currently stands at 4 cedi 35 pesewes against the dollar and may get worse according to some economists.<\/p>\n –<\/p>\n By: Godwin A. Allotey\/citifmonline.com\/Ghana<\/p>\n