Ghanaian importers are pushing for the use of Chinese Yuan to reduce FX pressures

The Ghana cedi has been depreciating freely and steadily against the dollar.
This is worrying since the Ghanaian business community especially importers trade in dollars.
The business community have therefore suggested the introduction of the Chinese Yuan as a major currency in Ghana.

The Ghanaian business community is advocating for the introduction of the Chinese Yuan as a major trading currency in Ghana to reduce pressures on the Foreign Exchange (FX) market.

According to business owners especially importers, this will ensure that the dollar is under little or no pressure in order to slow down the cedi’s depreciation against the US currency.

An Executive Member of the Ghana Union of Traders Association (GUTA) Benjamin Yeboah told Accra-based Citi FM said “Whatever steps that can be taken so that we don’t have to depend on the dollar so much has to be taken. I don’t see why we should be wasting that much time if there is a possibility in using it.”

He said the government must start discussions with the Chinese government in that regard.

In a related development, the Importers and Exporters Association have called on the Bank of Ghana to make the Chinese Yuan more accessible.

“It is important if the Ghanaian government allows the Yuan to be used by people who go to the Chinese market to buy,” President of the Association, Samson Asaki Awingobit said.

China is Ghana’s second largest trading partner after Europe.

According to the statistics from the Trade Ministry Ghana imports items worth over 2 billion dollars every year. These items include textiles, machinery, vegetable oil, plastics, and chemical products.

This means that the importers have to change millions of cedis into dollars to enable them to pay their manufacturers and suppliers in China, increasing the demand for the dollar.

Despite this call, an Economist at the University of Ghana, Dr. Ebo Turkson said using the Chinese Yuan is not the only measure to address the situation.

“The Bank of Ghana can make sure that their counterparts in China can make free transfer of resources so the traders can easily transfer funds without having to change the money into dollars physically in Ghana before sending it.”

He was of the view that changing millions of cedis into Yuan and making it accessible on the Ghanaian Market is not the best option.