Some currency analysts are projecting that the cedi will continue its losing streak against major trading currencies until external factors influencing its performance stabilize.
The local currency has been depreciating against the dollar particularly for some time now with some analysts predicting it will hit the 5 cedi mark soon.
As at close of business on Monday [September 10, 2018], some banks were selling a dollar for 4 cedis 97 pesewas.
The rates as quoted by some forex bureaus were as much as 5 cedis to a dollar.
The perennial issue has largely been blamed on Ghana’s economic model which is highly dependent on imports, a situation the Senior Dealer for Corporate and Forex at Republic Bank, Nana Yaw Kissi Nyame, says will require political commitment to reverse the trend.
“It is only when we come to a point where we build up our industries to the point where we are able to export our goods and get foreign currency which then balances out what we use for imports; at that point we can have some relative level of stability,” he noted.
Citi Business News’ analysis show that cumulatively, the cedi depreciated by 26.12 percent in 2017.
Between January and June of the same year, the local currency depreciated by 7.75 percent.
However, for the same period this year, the cedi depreciated by 1.59 percent.
Responding to how the international market developments have impacted the weak performance of the cedi, Nana Yaw Kissi Nyame said that the attractive interest rates will continue to repel investors from emerging markets which will impact heavily on supply of dollars.
“What’s happening is that, we have these investors pulling out or exiting their positions from Ghana and other investment markets so that they can take advantage of the hike in the US markets and so exiting their position now means that they would have to buy the dollars that they brought in which is the reverse when they initially bought into investments in such developing markets. They need to buy the dollars and go and invest it somewhere,” he further explained.
For now, it is anticipated that the yuletide may trigger another round of depreciation if the central bank fails to tame the situation with robust measures.