The struggling Ghanaian cedi is expected to bounce back earlier than thought as the Bank of Ghana is all set to make the Chinese national currency, the Renminbi popularly known as Yuan; a direct exchange currency.
Sources at the Bank of Ghana say the central bank has made significant progress in getting the Yuan into the country’s currency trading system to pave way for people, especially traders, to directly change the Yuan for cedi or vice versa.
The BoG’s decision will put an end to the current situation where most people especially; Ghanaian traders are forced to first convert the Cedi into US Dollar or any of the widely accepted foreign currencies before converting them into the Yuan.
Trading between Ghana and China rose from US$3.47 billion in 2011 to about US$5 billion last year.
Although much of that trade favored China, as they are in the form of imports into the country, some Ghanaian traders are beginning to gain access into the Chinese market, hence the need for a direct conversion of that country’s currency into the Cedi and vice versa.
The Renminbi is the official currency of China. However, the Yuan, which is a unit of the Renminbi, is widely known in the currency world as the official medium of exchange for the people of China.
As a result, China’s national currency is often called the Chinese Yuan or the Yuan Renminibi and has CNY as its international standard organisation (ISO) currency code.
The decision by the BoG to ‘lift the ban’ on the use of the Chinese Yuan in Ghana is also to reduce pressures on the local currency, the Cedi, an unnamed source at the Bank of Ghana has disclosed.
The Ghana cedi has sharply depreciated against major trading currencies for some time as a result of which the BoG recently introduced stringent measures to arrest the situation.
Sources say the Central Bank has finalized agreement with Standard bank to open an account for the Chinese Yuan which is expected to aggressively compete with other international currencies like the Dollar, Pounds and the Euro.
The aL-hAJJ has gathered that, Ghana unlike Zimbabwe which abandoned it worthless currency in 2009 for Yuan and other three Asian currencies will not do away with its currency, the Cedi.
Zimbabwe has adopted the Chinese currency as its legal tender following years of economic mismanagement and international sanctions led by the European Union (EU) and the United Kingdom (UK).
Thanks to the new policy, Ghanaians and their businesses will now be allowed to open accounts in Yuan, a move by the Ghanaian authorities to fight inflation brought about by the unprecedented depreciation of the local currency.
Source: The Al-Hajj