The founder of the Danquah Institute and renowned Ghanaian lawyer, Gabby Asare Otchere-Darko, has called out forex traders in Ghana for artificially shorting the market to hike up prices, a practice contributing significantly to the stark depreciation of the cedi.
According to Gabby, numerous traders in Ghana buy up all the dollar stock in the system and hoard, creating a shortage which they then exploit by hiking up their prices.
The short dollar supply raises the exchange rate and leads to the continued depreciation of the cedi.
The Ghanaian cedi has been steadily declining all year against its major trading partners, culminating in the recent shocking milestone of a dollar trading for Ghc 10.
Addressing the depreciation crisis, Gabby Otchere-Darko shared a video of a classic business tactic of buying up a competitor’s supply and then raising prices when demand far outstrips supply.
The Wall Street Journal shared the video on Twitter which Gabby reposted.
“This is what some foreign exchange traders in Accra are suspected to be doing. You suck up fx from other market players, which allows you to create artificial shortages in certain quarters and then hike up prices,” the senior partner at the Africa Legal Associates law firm wrote.
This is what some foreign exchange traders in Accra are suspected to be doing. You suck up fx from other market players, which allows you to create artificial shortages in certain quarters and then hike up prices. https://t.co/23o99QHKqn
— Gabby Otchere-Darko (@GabbyDarko) August 22, 2022
Cedi One of Worst Performing Currencies Worldwide
According to the latest Bloomberg currency performance ranking, the Ghanaian Cedi is the second worst performing currency in the entire world, behind only Sri Lanka.
The worsening depreciation recently prompted the bank of Ghana to warn that forex traders flouting the foreign exchange law would have their establishments closed if found out.
Head of Financial Stability at the Central Bank, Dr Joseph France, said the bank is carrying out numerous investigations into some complaints received about some forex operators who are flouting the laws.
“We have started investigations into some complaints. We have heard that some don’t issue receipts and some are also determining forward rates which is bad. We will ensure that they all do good business,” Dr France said.
“When we are done with the investigations and it warrants to close their bureaus, we will do that to serve as a deterrent to others,”