Associate Professor of Economics at the University of Ghana, Prof Ebo Tuckson, has urged Ghanaians not to panic over the rate of depreciation of the Ghana cedi, as it will soon bounce back.

According to the Professor, who is also the Programme Coordinator of the Economic Policy Management Programme (Dept. of Economics, University of Ghana), this development is a normal phenomenon that often occurs at the beginning of every year.

Speaking on the Super Morning Show, on Tuesday, he explained that this is "obviously coming from the fact that most FDIs with those generous investment packages normally repatriate their profits after a year."

"It's something that we don't need to panic. It normally happens around this time and it's something that we should expect," he said.

The local currency has crossed the GH¢7 to one dollar mark on the retail market within less than two months into 2022.

He, however, entreated the bank of Ghana to put in measures to ensure the rate of appreciation soon bounces back.

Joy Business checks at some forex bureaus and commercial banks indicate that a dollar is being sold at a little above GH¢7 cedis.

Whilst some forex bureaus and banks are buying a dollar between GH¢6.85-¢7, they are selling one dollar for GH¢7-GH¢7.05.      

The cedi’s predicament has been largely attributed to the uncertainty about Ghana’s fiscal outlook, despite interventions by the Bank of Ghana.

Lack of confidence in the Ghanaian economy by some investors has fueled the selling of some of the country’s international bonds, whilst demand for the dollar for imports keeps rising.  

The Professor also believes that the development is also due to the fact that "our importers that do a lot of trading in Asia normally close their balances at this time of the year, hence, there's normally unusual pressure on the cedi during the first two months."

He believes the rate of depreciation has been contained in the past few years because, possibly, Ghana got some loans or support and the central bank was able to use those foreign currencies to intervene and slow down the pace of depreciation.