[ 2017-02-28 ]

Allow cedi to fall to assess its strength- Dalex CEO 
The Chief Executive Officer of Dalex Finance Ken
Thompson has reiterated calls to allow demand and
supply to determine the strength of cedi until it
reaches it equilibrium.

According to him, government will have a better
appreciation of the real strength of the cedi if
it is allowed to fall to its normal level.

In addition, Mr. Thompson argued that government
will have ample time to invest in productive
sectors of the economy to improve the cedi’s
worth.

“I am not exactly sure why we struggle with cedi
depreciation. The cedi will always depreciate; it
is the rate at which it depreciates. It is a
supply and demand [situation],” he said.

According to him, the volatility of the cedi will
continue to linger on so far as the country tends
to import more than it exports.

“There is more demand than supply so it is going
to depreciate. Also, you can’t expect to import
everything, export very little and have a stable
currency. That doesn’t happen.” he added.

The cedi has seen a sharp decline since the
beginning of the year with it depreciating by
about 5.4 % on the interbank forex exchange market
and 6.72% in the same period across forex bureaus
in the country.

In the same period a year ago the cedi performed
better in forex bureaus across the country
depreciating by only 2.5 percent.

Mr. Thompson said government can fix the
depreciation issues by investing in the
 productive sectors such as the Agriculture to
increase the country’s export market.

“As far as I’m concerned, let’s allow the
cedi to depreciate and I truly believe that the
true value of the cedi now is between 5 to 5.5
cedi to a dollar. Let’s allow it to depreciate
and let’s invest in Agriculture so that we can
increase our export.”

He warned that the situation will not get better
with the indulgence of the Central Bank, stating
that government can only deal with the Cedi issue
if the right productive sectors are invested in.

“Any attempt by the central bank to intervene
will fail because it’s a supply and demand
issue. Allow it to depreciate and then we deal
with the consequences,” he stated.

Source - citibsinessnews.com

... go Back