Audio By Carbonatix
The Managing Director of Ecobank, Sam Ashitey-Adjei, has suggested currency hedging to reduce the impact of the declining cedi on big businesses.
He told Joy Business after the launch of its SME Club that options such as currency hedging, along with similar risk management strategies can help lessen the burden most businesses are currently carrying.
He however noted that the effectiveness of hedging will depend on big businesses' ability to get hedging counterparts.
"You will always have to be in the middle. You do a forward for a client and you have to do a reverse forward with another counterpart to hedge yourselves. We only do that when we have counterparties", he said.
He noted that the challenge with hedging has to do the nature of Ghana's market, which he acknowledges is not deep enough to support currency hedging.
The local currency from January to date has depreciated against the dollar by a little over 12 per cent.
The cedi-dollar exchange rate currently stands at GH¢3, 77 pesewas.
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