Executive Secretary of the Chamber of Petroleum Consumers (COPEC), Duncan Amoah, says the Bank of Ghana must urgently intervene to stabilise the forex market following the swoop on black market dealers.

He says the exercise has triggered sharp rate jumps within hours and could push fuel prices up if not corrected quickly.

Speaking on Joy News' PM Express Business Edition, he said, “The swoop on black market forex dealers has had a very dire impact.”

He said that on Thursday morning, “¢12.3 was the figure that came, yesterday was ¢12.3 on the open market.”

He explained that interbank rates are lower, “but for some of the business people, you go to the banks, the bank says they don’t have the dollar, so you may need to source it from the open market.”

Mr Amoah said the effect was dramatic. He said “from the ¢12.3 it came to ¢12.45, ¢12.6, and ¢12.7.” He said that “as of the time we were leaving the office, they were quoting ¢12.95 just within a few hours.”

He said this was proof the operation “actually had an impact,” as many traders are now afraid to sell.

“Those who probably still have the dollar are probably unwilling to sell because they think it’s a setup or something,” he said. He said traders who would usually respond to demand are now holding back.

He said, “Some are unwilling to trade at this point, and so the few who would want to trade would need to cash in.”

He pointed to the jump “from ¢12.3 averages on the open market” to “¢12.85, ¢12.95 to ¢12.60.”

Mr Amoah warned that the situation “will have a telling if it is not halted at some point, if the Bank of Ghana does not intervene.”

He acknowledged the central bank’s performance this year, saying, “It’s done a very good job throughout the year, the managers of your economy have done quite a tremendous job.”

But he cautioned that “there’s a danger from today, if they don’t intervene properly, and this trend continues, and then tomorrow you wake up, it is ¢13, ¢13.2 or ¢13.5.”

He said the fuel market will react immediately. “The fuels market will respond,” he stressed. He reminded viewers that Ghana has been “auctioning dollars to the market via BoG intervention.”

Mr. Amoah said past interventions were larger. “Years back, we used to do about $80 million, $120, $160 and $200 million at some point,” he said.

He added that it has now “declined to $40, $50 and $60 million.” He said Ghana’s petroleum market needs about $400 million, and “if you’re able to provide even $100 million, it means that $300 million will have to be sourced in and around both interbank and the open market.”

He warned that “if the open market behaves the way it is doing, they may not be able to hold prices further.”

Mr Amoah said the current situation is “not a desirable outcome.” He added that “it is not something we would all want to have.” He urged authorities to assess the full impact of the arrests.

“Whatever the intention of that action, the swoop of the forex dealers, I think that they need to review and see the effect it is having on forex trading on the market, because once there’s a negative effect.”