Cedi not in bad shape – BoG defends

The Bank of Ghana (BoG) says although the cedi has been performing poorly in the past two months, the situation is not out of control.

Director of Finance Markets, Steve Opata attributed the steep fall of the cedi to some pressures on the market but added that the situation is not as bad as it seems.

“There have been some pressures in the past two to three months but even if you look at it in context, I will say we are not in a really bad shape.

“We have seen the worse, we think last year was better than this year, so if you compare it to last year you can say the cedi is not performing well,” he said on Joy FM’s news analysis programme Newsfile on Saturday.

The steep decline of the cedi against major trading currencies like the US dollar and British pound sterling in recent weeks has become a major source of concern for businesses.

Analysts have attributed the sharp fall to the exit of investors from emerging markets like Ghana.

Graph: Trading Economics forecast on the cedi

From ¢4.42 to the dollar in January this year, the cedi is now valued at ¢4.78 to the dollar at the interbank rates but is trading at ¢4.94 at some forex bureaux in Accra.

This has resulted in a drop of 6.9 percent this year, more than the cumulative depreciation of 4.7 percent for the whole of 2017.

The Minority spokesperson on Finance, Casiel Ato Forson, has wondered how the cedi would be depreciating after the Finance Minister, Ken Ofori Atta, came to parliament in November 2017 to declare that Akufo-Addo regime has turned the economy around within a year.

Mr Ato Forson has predicted that the depreciation could get worse by Christmas when imports drive demand for the Dollar against the Cedi goes up.

But the BoG says the situation will improve by the end of the year.

RelatedCedi hasn’t been this better in 6 years – Bawumia defends

We are taking appropriate actions to ensure that we end the year very well,” Mr Opata said.

He added that although he agrees with suggestions that the country should discover more export avenues in order to give the cedi a good standing, “where we are now, we are in a good place.”

Giving figures, he said in 2010, the cedi depreciated by 3.9 percent, 4.97 in 2011, 17.52 percent, 14.55 percent in 2013, 31.25 percent in 2014, 15.7 percent in 2015, 9.7 percent in 2016 and 4.88 percent in 2017.

“We have not ended the year yet but the latest figure picked or year to date depreciation was 7.9 percent,” he said.

Ghanaians are right in demanding stable macroeconomic parameters but since there are global economic pressures affecting it, the cedi may falter once in a while but that does not mean things are out of control, he added.