‘What do I do with my dollars?’ - GUTA reveals growing panic among traders holding on to forex

Charles Kusi Appiah is the Head of the Business and Economic Bureau at GUTA. He has noticed growing panic among traders holding foreign currency. This is due to the cedi's continued strengthening.

Many traders are calling him for advice on their dollar holdings. One trader asked, “What should I do? Are we seeing a downtrend in forex?”

Appiah confirmed that this fear is justified. The cedi is gaining value, making it costly to hold dollars. “It doesn’t make sense to hold something you’re losing money on,” he warned.

He advised those without urgent needs for foreign currency to liquidate it. They should consider safer investment options, like gold coins.

During unstable economic times, traders often turn to forex as a hedge. They trust forex when the cedi isn’t performing well.

However, Appiah noted that current market conditions are different now. The local currency has become strong enough to be a store of value.

He attributed the cedi’s strength partly to government initiatives. Programs like Gold-for-Oil and Gold-for-Reserves have reduced demand for forex.

With GoldBod transactions using gold instead of forex, there’s less need for foreign currency.

Among GUTA members, there is a noticeable shift in behavior. The demand for forex in international trade has decreased as the cedi appreciates against it.

Appiah emphasized that holding onto forex while losing value no longer makes sense. Forex hoarding used to protect capital during depreciation but isn't effective now.

He explained that when forex outperforms the cedi, working capital depletes quickly. Traders would limit their losses under previous dynamics.

Now that demand for forex has reduced, its downward trend continues in the market. Appiah urges traders to reassess their strategies: “Dump the dollar if it’s no longer working for you.”