Member of Parliament for Walewale, Dr. Kabiru Tia Mahama, has downplayed the recent appreciation of the Ghanaian cedi, attributing it largely to the weakening of the U.S. dollar rather than any significant improvement in Ghana’s economic fundamentals.
Speaking on Channel One Newsroom on Monday, May 12, Dr. Kabiru highlighted that the cedi’s recent stability is due to the weakening U.S. dollar caused by global market shifts, including trade tensions between the United States and China.
According to him, the cedi’s appreciation may be short-lived and unsustainable.
He cautioned that the current trend could reverse once the government resumes its financial obligations, particularly making payments to Independent Power Producers (IPPS)
“The stabilisation is largely due to the fact that the United States currency is weakening against all trading currencies because of tarrif war between the US and China. Today, Bloomberg is reporting that the dollar is gaining its strength because there’s an agreement between China and the US.
“I will not be surprised that in the next three weeks, we then see a trend back to the depreciation. This is not sustainable. The other reason is that the government has not started any payments. No payment has been made to IPPS. The moment the government starts paying, they will be changing into dollars. The demand will be high, the price of the dollar will go up, and the cedi will depreciate,” he stated.
Dr Kabiru urged the public to hasten slowly on applauding the government for the cedi’s performance until after critical payments are made and the currency continues to hold its value.
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