An economist with the University of Ghana Business School Dr Lord Mensah has backed claims that the deadly Coronavirus could be a reason for the recent stability of the cedi
According to him, Ghana does huge volumes of trade with China and therefore not surprising that traders may not be changing dollars for trips as a result of the situation in the Asian country.
“Obviously I won’t rule that out, we are not in a standalone economy. For Ghana, a chunk of our trade is with China and because of the virus, people may not be changing dollars.
“I won’t be surprised that it (coronavirus) could have that positive impact on our currency. Even though it is China, most of the transactions we do with them is in dollars and even the Chinese prefer it that way. I won’t be surprised to attribute that to it but we will need a scientific reason to prove that,” he told Francis Abban on the Morning Starr Wednesday.
Some members of the opposition NDC were first to attribute the performance of the Cedi to the coronavirus epidemic.
National Communications Officer of the party Sammy Gyamfi is on record to have argued that Ghana’s level of imports from China makes it impossible not to be impacted by the dire situation there.
“The reason why we are seeing some stability is not because of any economic intervention put in place by this government, 37% of our imports comes from Asia and I’m telling you that there no single economic intervention that is bringing about this stability.
We are not the only country exposed to China but Our level of exposure is one of the biggest. We are talking 37% of our imports coming from Asia and as a student of economics you know that some of these things have a bearing on the figures.
“If we’re not importing and businessmen are not going to China like they do the pressure on the Ghana cedi will go down and you’ll begin to see some stability. You can choose to celebrate that like the government is doing but very soon they will see their smoothness level”.
The Bank of Ghana, in its latest Summary of Economic and Financial Data noted that the cedi, early this year, appreciated 0.3% against the dollar, and also made a 1.9% gain on the British pound. The local currency also made a 2.3% gain on the Euro.