Dealing with Cedi Speculation: Seek Ye First Stability & Behavioral Change Will Follow

Seek ye first the stability of the cedi, and all other things such as confidence, pricing, investment, shall be added unto it. This is a call from Adolph Kpegah, Executive Director of Strategy and Operations at ABSA Bank Ghana, to the Bank of Ghana.

Adolph Kpegah is convinced that prioritizing currency stability is the antidote to dollarisation and speculative behaviour in Ghana’s economy, which has been a bane on the cedi.

Speaking at the UPSA Law School–ABSA Quarterly Banking Roundtable, Kpegah explained that the reluctance of businesses and individuals to price goods and services in the cedi has less to do with preference for foreign currency and more to do with rational economic behaviour rooted in Ghana’s historical experience with depreciation.

He says the Ghana cedi is performing creditably as a medium of exchange but has failed as a store of value due to persistent depreciation. This forces people and businesses to choose the US dollar over the local currency.

“The fundamental question is that why are people unwilling to price in cedi, and rather they will do dollar? And why are people rather preferring the dollar to the cedi? Currency has multiple purposes beyond medium of exchange. Yes, the cedi can serve as a medium of exchange, but is it serving as a store of value?” he quizzed.

A Case of Past Experience Shaping Present Behaviour

The banker pointed to a long-standing trend of one-directional currency movement, which is depreciation, as the core reason why many Ghanaians continue to favour the dollar.

He explained that speculative behaviour and dollar pricing are symptoms, not the root cause.

“If the currency is not holding value, then definitely, people being rational will continue to find ways to maximise their economic benefits. But truth be told, until this year, our currency movement direction has always been depreciation,” he indicated.

The ABSA Executive emphasized that the challenge is not emotional or ideological; it’s a logical economic decision. Individuals and companies want to preserve value. If the cedi weakens, a transaction done today in local currency might be worth significantly less tomorrow.

But, encouragingly, Kpegah noted that recent signs of cedi strength in Quarter 1 and Quarter 2 of 2025 had already begun influencing business decisions and behaviour towards the cedi.

He maintained that, “People are rational. So, they say, yes, we’ve had quarter one, quarter two. Things are looking good. Is it stable? Is it going to be stable? If we are able to hold the stability over time, it will affect behaviour. Because we saw in quarter two that suddenly there were reports that real estate companies were pricing in cedi. Why? Because they were losing in dollar terms. The rates were dropping. So, they were suddenly pricing in cedi.”

BoG’s Crucial Role in Shaping Confidence

Given the rationale behind people’s behaviour, Adolph Kpegah made a strong call for the Bank of Ghana to stay laser-focused on maintaining stability, not necessarily forcing appreciation.

He acknowledged the BoG Governor’s position that Ghana operates a flexible exchange rate regime, where some fluctuation is expected, but insisted that consistent stability over time is what would cause real behavioural change.

For him, trust in the cedi won’t be restored through laws or slogans alone; it must be earned through consistent performance. And once that trust is built, currency speculation, informal dollar pricing, and hoarding behaviours will begin to fade.

“If we are now in a period where the central bank is fully focused on stability, fully focused on defending their currency, it gives some assurance, and therefore people can be encouraged and will, in my mind, over time begin to be inclined more to holding cedi than any other currency,” he insisted.

The Bottomline

The ABSA Bank executive’s remarks come at a time when Ghana is actively fighting currency speculation and illegal dollarisation, with the Bank of Ghana stepping up enforcement of legal tender laws. But as he rightly noted, enforcement must be matched with consistent monetary performance.

His antidote resonates with economists and analysts who believe that if Ghana seeks to win the war against speculation and restore full confidence in the cedi, stability of the currency should be the marching orders.

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