Cedi Fall Resurfaces

The Cedi’s continuous depreciation against major foreign currencies has negatively affected the operations of most companies in the country.
The demand for the US dollar continues to outweigh its supply.
The Central Bank, in the middle part of this year, announced that it had sufficient foreign exchange to inject into the country’s economy to stabilize the cedi against major foreign currencies.
It earlier announced plans to inject $20 million daily into the money market.
Despite the assurances and claims, the depreciation scourge has resurfaced, casting into doubt the ability of the Bank of Ghana (BoG) to bring the situation under control.
As at yesterday, it was buying at GH¢3.9777 and selling at GH¢3.817.
A British Pound was buying at GH¢6.2382 and selling at GH¢6.2465. The Euro was buying at GH¢4.4540 and selling at GH¢4.576.
Government has on numerous occasions touted its ability to salvage the situation on the strength of the flotation of Eurobonds and the cocoa syndication loans but all these have not been able to correct the anomaly.By the middle of this year, the local currency had depreciated by over 25 percent.
Latest to add his voice to the cedi’s unstable performance is Ken Thompson, Chief Executive Officer (CEO) of Dalex Financial Services.
He predicted that the local currency would fall against the major trading currencies and hit close to GH¢6 to a dollar by close of year.
In an interview with Citi Fm recently, Mr Thompson stated: “When I made my prediction in February, I remember the Finance Minister came on air the very next day and said that he agrees with me that the cedi has been overvalued but he didn’t think it will fall to 6. Till now, nothing has happened and changed for me to change my predictions.
Also the cocoa crop has failed, the amount we expect from cocoa is going to be nowhere near what we expect therefore the supply demand situation has not changed.”
By Samuel Boadi