Dr Assibey-Yeboah who is also the Member of Parliament (MP) for New Juaben South constituency explained that a very strong cedi will hurt the exports and tourism as well as the country’s economy.
A strong cedi will not benefit the Ghanaian export and tourism sectors according to Dr Assibey-Yeboah
The Chairman of Parliament’s Finance Committee, Dr Mark Assibey-Yeboah, has said that if the Ghana cedi appreciates against the dollar beyond a certain threshold it will affect export and tourism earnings.
“We get more cedis when our export earnings come in and already we have programmed in our budget that we will get so much, so once the currency is getting stronger and stronger, it gets to a certain threshold it is worrying.”
“So if right now the cedi dips under five cedis per dollar, the Bank of Ghana would be concerned. They would reduce the supply of dollars to push the price or exchange rate back up, so a very strong currency in and of itself is not a good thing. It hurts exports, affects tourism” he added.
He further explained that “all the foreigners coming here, if your currency is weak, they will rather come here than go elsewhere on vacation”.
His comment is coming at a time when the Ghanaian cedi is appreciating against major foreign currencies since 2020 started.
This has not been the case in previous years. The cedi has persistently depreciated against the major foreign currencies especially the dollar in recent years. The cedi’s recent appreciation has raised concerns over its sustainability and potential volatility.
The cedi ended the month of February 2020 with an appreciation of about 5.75% to the US dollar on the interbank market.
This performance is due to the Bank of Ghana’s (BoG) interventions on the spot and forward markets. The low demand for foreign currencies by importers mainly due to the coronavirus outbreak in China.
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