Contrary to media reports that the Cedi is under pressure because of the festive season, Business Finder’s checks indicates that the local currency is not under pressure.
It is however unclear whether it will be under pressure in the last two weeks before 2017 ends.
The local currency hit GH¢4.70 to the US dollar at the forex bureau during the third week of November 2017 but has since retreated to about GH¢4.50. On the interbank market, it is trading between GH¢4.40 and GH¢4.41 against the American dollar.
According to Ecobank Research tracking of the performance of the cedi, the local currency lost 0.1 percent in value against the US dollar last week. The year-to-date depreciation is however 4.0 percent.
It is, therefore, projecting GH¢4.39 to one US dollar-an appreciation- ahead of settlement for the 5-yr, 7-yr, 10-yr and 15-yr GH¢ bond sales this week.
It added that “the local currency has been supported by strong foreign inflows to debt markets and improved fundamentals with robust GDP growth of 9 percent year-on-year in quarter two 2017 and a cumulative trade surplus estimated at 2.5 percent of GDP for January to August 2017, against a 4.3 percent of GDP deficit in same period in 2016.”
Among West African currencies, it is doing better than Liberia dollar (27.4 percent depreciation), Nigeria Naira (12.4 percent depreciation), Sierra Leone Leones (27.0 percent depreciation) and The Gambia Dallasi (10 percent depreciation). However, currencies such as Ivory Coast CFA, Guinea CFA and Cape Verde escudo have all appreciated against the American dollar this year.
South African rand, Namibia dollar and Lesotho loti are unchanged in value against the World’s most important currency this year.
The Ghana cedi lost about 4.0 percent in value against the US dollar for the nine months of this year, below the GH¢4.52 end- year forecast by BMI, research outfit of ratings agency Fitch.
The Central Bank recently said foreign exchange market conditions remain relatively stable supported by improved liquidity conditions, despite some marginal demand pressures. It added that from January 2017 to August 2017, the Ghana cedi depreciated by 4.5 percent against the US dollar, compared with a depreciation of 3.9 percent in the same period of 2016.But it appears the cedi witnessed some improvement in the month of September 2017.