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GUTA calls on BoG to relax currency exchange rules amid Cedi depreciation

In light of the Cedi's depreciation, the President of the Ghana Union of Traders Association (GUTA), Dr. Joseph Obeng, has called on the Bank of Ghana (BoG) to ease its stringent currency exchange regulations.

Ernest Addison

This appeal highlights the growing concerns among traders and businesses who are feeling the strain of the fluctuating exchange rates on their operations and profitability.

The depreciation of the Cedi has been a pressing issue for the Ghanaian economy, causing significant challenges for importers who rely heavily on foreign currencies to conduct their businesses.

The restrictive currency exchange rules currently in place are exacerbating these challenges by limiting access to foreign currency, thus driving up costs and squeezing profit margins.

Dr. Obeng speaking on Joy News emphasised that the current regulatory framework inadvertently drives more traders to engage with forex bureaux and the black market rather than mainstream banks.

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He said existing regulations, while intended to stabilize the currency and prevent capital flight, are inadvertently stifling economic activity and growth.

He argued that a more flexible approach is needed to support traders and businesses during these turbulent times.

"Because you know, the fear factor there is the documentation, the requirement, stringent documentation. They have to relax their stringent documentation.

"If you make a stringent documentation requirement, then people do not transact through the banks. For the Bank of Ghana what you need is a bill of lading and then your transactional value, that should be enough for you. People will not be panicked about whatever the accounting aspect of all that," Dr. Obeng stated.

He proposed that the BoG consider a temporary relaxation of these rules to provide much-needed relief to traders. This could involve measures such as increasing the daily foreign exchange limits for businesses and simplifying the process for accessing foreign currencies.

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Dr. Obeng believes that such steps would help stabilize the market, boost confidence among traders, and ultimately contribute to economic recovery.

Moreover, the GUTA president highlighted the importance of a collaborative approach between the government, the BoG, and the business community to navigate the ongoing economic challenges.

He called for open dialogues and consultations to ensure that policy decisions are well-informed and consider the practical realities faced by businesses.

The BoG, in response to similar calls in the past, has maintained that its policies are designed to safeguard the country’s foreign exchange reserves and maintain economic stability.

However, with the Cedi's depreciation continuing to impact the economy, there is a growing consensus that a balance must be struck between regulatory controls and economic flexibility.

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Economic analysts have noted that while easing currency exchange rules might offer short-term relief, it is crucial for the government to address the underlying factors contributing to Cedi’s depreciation.

This includes improving export performance, attracting foreign investment, and implementing sound fiscal policies.

As the dialogue continues, traders and businesses across Ghana are hopeful that the BoG will take their concerns into account and introduce measures that will help mitigate the impact of the Cedi's depreciation on their operations.

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