The General Manager of NDK Capital Limited, Mr. Hammond Mensah is optimistic the cedi will experience some level of stability in the short to medium term as the Bank of Ghana prepares to implement the amendments to the requirements for surrender and repatriation of export receipts by exporters.
Speaking to Citi Business News on the impact of the new directive on the cedi, Mr. Mensah said the move will help SMEs in the export and import sectors to plan properly as the currency’s performance can be predicted.
“Now, once that has happened we expect SMEs to plan better because of the stability that these rules are expected to bring into the system. Secondly, there will be a lot of dollars in the system which means our need for dollars will be met internally and we may not have the situation where we have a lot of cedis chasing dollars,” he said.
He maintained that “ the fact that the regulator is now allowing the forces of demand and supply to determine the true level of the local currency is a good thing as its been proven all over the world that it is more prudent way of establishing price discovery and stability”.
He argued that the move will allow demand and supply to determine the prices on the market as there will be enough dollars on the market.
“And so I will say that the stability it brings and allowing SME’s to adequately plan is a good thing.” He stated
From July 1, the BoG will commence the implementation of a new directive which will compel all exporters, except those with Retention Agreements to repatriate in full all their export receipts to their foreign exchange accounts (FEA) with local banks in Ghana to be converted into cedis on need basis.
AGI calls for monitoring
Meanwhile, the Association of Ghana Industries (AGI) has also called on the Bank of Ghana (BOG) to ensure full adherence to its new directive on surrender and repatriation of export receipts by the business community in Ghana.
The AGI argued the move will allow demand and supply to determine the performance of the cedi against the dollar on the market.
Welcoming the development the President of the AGI James Asare Adjei told Citi Business News it will increase the confidence of the business community in the economy.
He was of the view that the exporters and importers will cease the habit of hiding their foreign currency.
BOG to monitor export documentation
The Bank of Ghana (BoG) has maintained that the latest surrender and repatriation of export receipts will spur the country’s socio-economic transformation agenda.
The move, it explained is targeted at building an automation platform for export documentation to end the silos monitoring by various government agencies.
In addition, it will allow the BoG to monitor and properly document all exports of goods and services to make sure proceeds are repatriated to Ghana.
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By: Norvan Acquah – Hayford/citibusinessnews.com/Ghana