President of the Ghana Union of Traders Association (GUTA) Dr Joseph Obeng has said it will be premature to start talking about price reduction for goods and services due to the strength that the Cedi is gaining.
He said the market will respond when it should do so.
Explaining what has led to the resurgence of the Cedi against the Drolar, he attributed it to the positive speculation surrounding the bailout that Ghana is seeking from the International Monetary Fund (IMF).
He explained that the economy dwells on speculations hence when the speculations are positive, they naturally improve the system but when they are negative, confidence in the economy dips.
Per the Bank of Ghana rate, as of Wednesday, May 17 the Cedi was buying at 10.9538 and selling at 10.9648 to a Dollar
It used to hover around 12.5 per Dollar.
Bank of Ghana Exchange Rates pic.twitter.com/NXEc2qizUy
— Bank of Ghana (@thebankofghana) May 17, 2023
Dr Joseph Obeng said “It has not been stable for the last couple of weeks, it goes up a little, it comes down and then it will stabilize somewhere at 12.5 and now we see the sharp decline primarily due to the positive speculation.
“Our economy dwells on speculation…this particular time we are also denying the positive speculation around the IMF deal.”
Asked whether this trend will lead to a reduction of prices of good and services, he said “Now it will be too early. We do not plan price reduction, the price reduction is a natural sequence so when the exchange rates have gone down as we are expecting and it stabilizes for a longer period then you see that it trickles down on the prices, so it is not that when it goes up.”
“The market responds when it should respond,” he told Accra-based Joy FM on Tuesday, May 16.