The Ghana Union of Traders’ Associations (GUTA) says the recent appreciation of the cedi is being driven in part by a sharp reduction in demand for foreign currency among its members.

According to Charles Kusi Appiah, Head of Business and Economic Bureau of GUTA, traders are now abandoning the dollar in favour of the cedi, which has shown unexpected resilience in recent weeks.

Speaking on Joy News’ PM Express Business Edition on Thursday, May 8, he said the behaviour change is a direct reflection of improved confidence in the local currency and reduced need for forex in international transactions.

“When the cedi is not doing well, people put their trust in forex. The dollar becomes the store of value. But now the opposite has occurred. The cedi is appreciating. So why hold on to forex when you are losing value?” he said.

He explained that in unpredictable economic environments, traders traditionally used dollars to hedge their working capital.

“You always want to see what you can do to protect your gains,” he noted.

“People used to buy forex just to hold, even without immediate need, simply because it felt safer.”

“With the introduction of GoldBod, where most of the international transactions use gold, the demand for forex has reduced. So there’s no need for one to hold forex for any transaction,” Mr. Appiah said.

He said members of GUTA are now reconsidering the utility of holding dollars when the cedi appears to be the safer bet.

“Someone called me today asking, ‘What am I supposed to do? I’m holding forex. Are we going to see a downtrend of forex?’ And I told him, of course, yes. The trajectory shows that the cedi is gaining strength every day.”

He advised that it makes no economic sense to cling to a depreciating currency.

“If you think you don’t have anything to do with that forex, liquidate. There are other investment options, probably the gold coin, that you can invest in so you don’t lose totally.”

According to him, the pattern is clear. “Anytime forex outperforms the cedi, our working capital gets depleted.

"That’s why people used to say, let me limit my losses by buying forex. But when the dynamics change, and you see there’s no need to hold it, the demand reduces. And that is accounting for the downward trend of forex in our market.”

Mr. Appiah said this shift is not just about sentiment, but real market choices.

“The confidence has been that our local currency is strong enough to be the store of value. That is what accounting for the things we see now.”