THE Finance Minister, Mr Ken Ofori-Atta, has given the assurance that the recent fall in the value of the Ghana cedi will cease by the end of this month.
According to him, his outfit is working assiduously with the Bank of Ghana (BoG) to stem the recent deprecation of the local currency which until recently was one of the best performing currencies in Sub Saharan Africa.
The depreciation of the Ghana cedi has heightened concerns among traders’ particularly spare parts dealers and retailers who have threatened to pass the cost of depreciation to consumers if the trend does not stop immediately.
But Mr Ofori-Atta says “the cedi has depreciated marginally by about 0.2 percent recently. We are still within the band of a reasonable stable currency”, he told some journalists.
He added that the fiscal and monetary policies of the Finance Ministry and Bank of Ghana will help curtail the shocks that have hit the local currency.
It is believed that some capital flight due to investors selling their debt instruments on the bond market for higher rate of return particularly on the US market where the Federal Reserve announced new developments triggering interest in US money market instruments is the major reason to the cedi fall.
But Mr. Ofori-Atta is confident government macroeconomic targets including the exchange rate are achievable this year.
According to Ecobank Research, the cedi has depreciated by 0.8 percent against the US dollar since January 2018. It is still among Sub Saharan African countries that are doing better this year.
Apart from Kenya shilling (2.0 percent), The Gambian Dalasi (0.5 percent), Malawi kwacha (0.2 percent) and Sierra Leonean Leone (0.1), all the remaining 22 currencies in Sub Saharan Africa have declined in value against the American green back.
The worst currencies in Africa this year are Angola kwanza (-30.6 percent), Liberian dollar (-11.0 percent), South African rand (-7.8 percent) and Swaziland lilangeni (-7.8percent). The naira has also depreciated by about -0.3 percent in value against the US dollar.
The cedi ended the first quarter of 2018 with a 0.3 percent appreciation to the US dollar. Comparatively, it lost about 2.52 percent in value against the American green back in the first quarter of 2017 and lost about 4.15 percent in value in the full year of 2017. The Bank of Ghana had earlier reported that the cedi ended the first quarter of 2018 with an appreciation of 0.3 percent in value.
BMI, research arm of ratings agency, Fitch, had earlier in the year predicted that the local currency could end the year 2018 at GHc4.42 against the US dollar, about 0.67 percent appreciation to the American currency, in its 2018 analysis of the Ghanaian economy indicates.
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