The refusal by most Ghanaians who trade with China to adopt the Chinese Renmimbi as the medium of exchange has slowed efforts by the central bank to make the Chinese currency a traded one on Ghana’s Foreign Exchange (FX) market,Abdul-Nashiru Issahaku Bank of Ghana Governor disclosed here on Monday.

Bank of Ghana
Bank of Ghana
Addressing the media at the press briefing after the 75th regular meeting of the Monetary Policy Committee (MPC) Issahaku noted that the bank had made efforts to introduce the Chinese currency onto the market but with little success.

“We all recognize the significance of the “Renminbi especially now that it is part of the SDR basket of the International Monetary Fund, and we’ve made attempts in the past actually to start trading the Yuan. So we imported about 20 million dollars worth of Yuan for local businesses travelling to China, so that you don’t have to go to China to change your money,” he disclosed.

But these efforts, he said yielded very little results as traders would rather prefer dealing with the US Dollars or the Euro.

The value of bilateral trade between Ghana and China reached 6.6 billion U.S Dollars by the end of 2015, with China investing 174 million Dollars directly in the West African country in the same year.

“So that attempt has been made and we’ve had conversations even with financial institutions from China and Hong-Kong on how we can further deepen the market for the Yuan. You know the traders, some of them just want to feel the dollar or the Euro, going there. So it takes some time to get them change the mentality about the mentality,” the governor explained.

He called for more education for the traders so they understand the convenience to have single currency exchange transactions in their international trades.

Raymond Amanfu, Head of Banking Supervision at the central bank explained later in an interview that part of the difficulty had to do with the ‘bulky’ nature of the Chinese currency the traders need to carry for their transactions.

Now looking at the exchange rate between the dollar and the Yuan, you have about 1(dollar) : 16 (Yuan) so what it means is that a trader wanting to carry about 5000 (dollar) will need about 80,000 (Yuan); you look at the convenience and you also look at the challenges that you are likely to face on your point of entry when you are carrying so much huge currency, said Amanfu.

“If we are able to establish trade links or contact banks then transfers can be done and you go there and you have your money. If we have banks that have representative offices or open shops there then it will be easier for them to push their money; like Ecobank; push your money there and go to their agency in China and collect the RMB,” he added.

Amanfu also urged the traders to start importing their goods from China in groups so that bank transfers could be done for them in such groups to encourage the trading in the Chinese currency in the Ghana-China bilateral trade.

So far regional bank, Ecobank and Stanbic Bank, local subsidiary of Standard Bank of South Africa have China desks that deal with currency transfers between Ghana and China. Enditem

Source: Justice Lee Adoboe, Xinhua/NewsGhana.com.gh