Individuals and businesses have been cautioned against holding on to foreign exchange without immediate need, as the Ghanaian cedi continues to show signs of recovery.

Charles Kusi Appiah, Head of the Business and Economic Bureau at the Ghana Union of Traders’ Associations (GUTA), advised that unnecessary forex holdings should be liquidated.

Speaking on Joy News’ PM Express Business Edition on Thursday, May 8, Mr. Kusi Appiah highlighted the current market trajectory that indicates sustained appreciation of the cedi against major international currencies.

“If you don’t have anything to do with that forex, liquidate it,” he warned, emphasizing that retaining foreign currency in the current climate could result in significant losses.

He recounted an encounter with a concerned individual seeking guidance. “Someone called me today asking, ‘What am I supposed to do? I’m holding forex. Are we going to see a downtrend of forex?’ Of course, yes,” he responded.

He argued that continuing to hold on to dollars or other foreign currencies when there is no pressing need for them defies economic logic. “The trajectory shows that the cedi is day in and day out, gaining strength. So it doesn’t make economic sense for you to hold on to something you are losing every day.”

Mr. Kusi Appiah acknowledged that in the past, many traders relied on foreign exchange as a safety net amid volatility in the local currency. “People put their trust in forex when the cedi, the local currency, is not doing well and the forex becomes the store of value,” he said.

“Everybody wants to reference their investments. And when you are in an environment where predictability becomes a challenge, you always want to see what you can do to protect your gains.”

However, with reduced demand for foreign currency in international trade and a stable local currency environment, he believes those old assumptions no longer apply. “Now, forex demand has reduced when it comes to international trade, and the cedi is appreciating. Why do you then hold on to forex when you are losing value?”

Mr. Kusi Appiah credited government initiatives such as the Gold for Oil programme—referred to as GoldBod—for easing pressure on forex demand. “With the introduction of the GoldBod, where most international transactions use gold, the demand for forex has reduced. Therefore, there’s no need for one to hold forex for any transaction.”

He noted that many GUTA members have already started adjusting their financial strategies in line with these shifts. “Yes, the opposite has occurred. Now, the confidence is that the local currency is strong enough to be the store of value, so I don’t need to hold forex. That is what accounts for the things that we see now.”

He attributed the recent stability of the cedi partly to this decline in speculative demand. “When the dynamics have changed and you can see that there’s no need to hold on to it, the forex demand reduces. And that is accounting for the downward trend of forex in our market.”

To further protect their earnings, Mr. Kusi Appiah encouraged traders to consider alternative forms of investment. “There are other investment options—probably the gold coin—that you can invest in so that you don’t lose totally.”

Concluding his remarks, he issued a reminder about the risks of speculation. “When forex outperforms cedis, our working capital gets depleted. But if the cedi is now stable and strong, then it’s time to rethink. Liquidate what you don’t need.”