It’s too early to jubilate over cedi’s performance against foreign currencies according to the president of IMANI Africa, Franklin Cudjoe

The president of IMANI Africa, Franklin Cudjoe has said that Ghanaians should not jubilate over the appreciation of the cedi against major foreign currencies just yet.

President of IMANI AFRICA, Franklin Cudjoe

In an interview with Accra-based Joy FM, Mr Cudjoe said: “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.”

“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,” he added.

The cedi has been appreciating against major trading currencies since the beginning of the year. Many have attributed this to the significant drop in trade with China due to the coronavirus epidemic.

Fuel prices

Even though the cedi is appreciating against foreign currencies and fuel prices are dropping on the international market, Oil Marketing Companies (OMCs) in Ghana except for Goil have decided not to reduce their prices at the pump.

Commenting on this development, Mr Cudjoe said consumers of fuel products have the opportunity to choose from the list of available fuel stations if they think the prices at certain pumps are high.

Stakeholders in the oil sector have raised concerns over the OMCs failure to reduce prices at the time prices of crude oil on the international markets have reduced.

Mr Cudjoe argued that the causes of the stability of the local currency coupled with other price determinant variables may be short-lived.

He indicated 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."

Goil reduced prices by some 0.2% last Saturday, February 22, which many consumers consider as insignificant.

However, a former CEO of GNPC, Alex Mould, said citizens have been shortchanged since Goil could do better.

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