The president of IMANI Africa, Franklin Cudjoe says it is too early to jubilate over the appreciation of the cedi against other major trading currencies.
“I think the point about the stability of the currency is quite interesting, I mean let’s not mince words the stability of the currency so far is not necessarily due to any particularly stellar effort by the central bank,” Mr Cudjoe told JoyBusiness in an interview.
He added “Even though the forward sale of currencies are useful, but overwhelmingly we all know what it is; the plummeting fortunes of China and to think that most of our traders are no longer externalizing our dollars outside of the country has also impacted. I think it is early days yet to start jubilating. But of course, you want to take advantage of it right now, study it properly and see where there are opportunities to strengthen policy.”
The cedi has wrestled positively since the beginning of this year which many attribute to the significant drop in trade with China due to the coronavirus epidemic.
Fuel prices
Mr Cudjoe charged the public especially consumers of fuel products to choose from the list of options available if they consider the prices at certain pumps as high amidst cedi appreciation against other foreign currencies.
His call comes at the back of concerns raised by the Institute of Energy Securities (IES) over the adamant posture of fuel distributors to reduce prices at the time prices of crude oil on the international markets have reduced.
He believes the causes of the stability of the local currency coupled with other price determinant variables may be short-lived.
Mr Cudjoe indicates that “there could be other reasons why fuel stations are not reducing prices and it is not automatic that consumers should expect reduction over the temporal factors. The conditions are not going to last,” he added.
Goil reduced prices by some 0.2 per cent last Saturday, February 22, which many consumers consider as insignificant.
This action by the indigenous oil company did not go down well with the former CEO of GNPC, Alex Mould who believe the citizens are been shortchanged.
FX Committee
Even though Bloomberg reports the cedi weakened by about 0.7 per cent in the last two days trading at GH¢5.375 to a dollar, Franklin Cudjoe disclosed that the FX Committee set up by the government will deliver on their mandate within the three-month duration assigned.
Mr Cudjoe said, “Well the forex committee we were supposed to look at the transparency within the currency flows. As far as we are concern, we’ve met once or twice and other meetings are going on, other studies are going on. So it will be useful for us to wait for whatever we are studying in other to add to what the central bank is doing.”
