Black Market Arrests Trigger Rate Volatility, COPEC Reveals

The Executive Secretary of the Chamber of Petroleum Consumers (COPEC), Duncan Amoah, has warned that the recent crackdown on black market currency dealers is worsening instability in Ghana’s foreign exchange market and posing a direct threat to fuel price stability.

According to him, the cedi, already under pressure in recent weeks, is now experiencing sharp, unpredictable swings within hours, a situation he says is being compounded by the difficulty in sourcing dollars since the arrests began.

Speaking on Joy News’ PM Express Business Edition, Mr Amoah questioned whether the long-held explanation that competition among Oil Marketing Companies (OMCs) is sustaining fuel prices can still be justified under current forex conditions.

“As we speak, it’s competition that has kept fuel prices where they are,” he said. “My finding right now is to the extent that, of course, the cedi has been on and off.”

Mr Amoah described the performance of the local currency as unusually erratic, noting that there are brief moments of stability followed by sudden appreciation or depreciation.

He recounted events from Thursday, December 11, calling the day’s rate movements “alarming”.

“For today, Thursday, December 11, I can put on record that whilst at the office with a few people, we kept trying to source dollars from the open market, and you will be surprised by the rates that kept coming within one hour.”

According to him, rate fluctuations within a single hour were so severe that it became almost impossible for companies, including fuel importers, to plan or execute transactions.

Mr Amoah pointed squarely at the security swoops on illegal forex traders as a major trigger of the volatility.

“I think that whatever the task force did yesterday by arresting black market dealers is also having a negative impact,” he said, arguing that the clampdown has effectively pushed much of the informal FX supply underground, further tightening dollar availability.

The black market, though unregulated, plays a significant role in providing liquidity for businesses that cannot secure dollars through the formal banking system. Disrupting that channel without a corresponding strategy, he warned, creates panic, scarcity and price instability.

The COPEC Executive Secretary urged authorities to reconsider their methods in dealing with unauthorised currency traders.

He called for a more strategic and collaborative approach rather than punitive raids that shrink liquidity.

Authorities, he said, should “review carefully whether to indeed swoop in on these guys that provide the market with the forex or whether there should be a more, you know, friendly way of approaching them.”

Click the link Puretvonline.com | WhatsApp Channel to join the WhatsApp channel

GOT A STORY?

Contact/WhatsApp: +233243201960 or manuelnkansah33@gmail.com