Reduce the use of foreign currency; spend more cedis – Stanbic Bank to government
Head of Global Markets at Stanbic Bank Ghana Afua Twumwaa Bulley has advised government on the need to spend more of the Ghana cedi and use in moderation the foreign currency.
Ms Bulley indicated that the cedi depreciates whenever the demand for foreign currencies outstrips supply.
“The forex market is like any other market, once there is demand for it the price will go up. So when there is demand for the foreign exchange, the price will go up. So what it seeks to do is to curb or bring down the need for foreign currency and for us to spend more cedis which obviously will bring down demand and so should bring the currency down.”
She is therefore calling for the restraint of foreign exchange so as to balance some factors such as inflation, interest rates, fiscal deficit and trade surplus.
“There are lots of factors that affect the currency, most of which we have no control over as businesses or as individuals. So there is a need to do something about it.
Following the unending debate about the stability of the cedi, Afua Twumwaa Bulley mentioned that as a country, there must be an increase in exports in order to ensure more cash flows into the economy.
“We need to increase export just to get more flow coming in to meet the demand for the importers.”
Speaking at the Stanbic Bank Trade Series, June 12, 2019, she further encouraged the use of made in Ghana products. Stating that the demand for the foreign currency has been on the rise in recent times causing prices to continue to shoot up.
“As a country there are short term and long term measures. We can do things in the short term to reduce it but it takes a radical change in the things we do, from the things we import, so as a country, so far as we continue to be net importers, and so we have more demand for foreign currency than local because we are buying things not made in Ghana … so far as we are demanding that foreign currency, the price will continue to go up.”
Treasurer for Stanbic Bank Musah Alhassan also said that the cost of borrowing reflects the states of our economy and as a result of this, Treasury Bill will continue to fluctuate.
“The cost of borrowing reflects the states of the economy …we are getting to the regime where the rates will come down, that is if Treasury Bill rates or governments borrowing rate goes down… the foreign currency is also a reflection of the economy.”
The Stanbic Bank Trade Series which was held at the Kempinski Hotel in Accra saw several stakeholders, investors, customers deliberate on current happenings in the Ghanaian banking sector.