Mr Joe Jackson, Chief Operations Officer at Dalex Finance, believes the Cedi’s depreciation against the US dollar will slow.
He stated that people are giving up because it is difficult to buy dollars these days.
Similarly, he expects the government to send market signals that it is cutting back on spending. He also mentioned debt restructuring as one of the measures. He predicted that if this occurs, the Cedi fall would slow.
On Wednesday, October 19, he said on the Ghana Tonight show on TV3 with Alfred Ocansey, “It is a difficult time, but I expect the rate to slow down.” The rate will slow because it is currently very difficult to find dollars to buy, and most people have given up on buying dollars and are slowing. I also expect the government to announce measures soon that will demonstrate to the market that it is serious about cutting spending.
“The most significant of the measures will be debt restructuring; when that occurs, I expect the rate of Cedi depreciation to slow.”
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Recently, the Second Deputy Governor of the Bank of Ghana Elsie Addo Awadzi also said the fall of the Cedi against the Dollar and also the high inflation rate (32.7%) are temporary.
She expressed confidence of a positive outlook for Ghana’s economy.
Speaking at the 21st Annual National RCB CEOs conference on the theme ‘Positioning Rural banking at the Centre of Financial Services delivery in Ghana – the role of stakeholders” she explained that recent global developments have heightened economic and business uncertainties for businesses and individuals. Our domestic economy is not spared from these developments.
The Bank of Ghana, she said is working closely with the Ministry of Finance and other key stakeholders to negotiate a sound economic reform programme supported by the IMF, to stabilise and transform our economy.
“We at the Bank of Ghana are confident about the outlook for our economy. The current high inflation and cedi depreciation are temporary, and we must avoid speculative behaviour that only works against attaining stability sooner,” Mrs Addo Awadzi stated.
Some forex bureaus are selling the local currency between ¢12.50 and ¢12.95 as of Wednesday October 19.
The BoG recently identified five key reasons for the woes of the local currency.
They were “The strength of the US dollar, Investor reaction to Credit Rating Downgrade, Non-Roll over of Maturing Bonds, The sharp rise in crude oil prices and impact on the Oil Bill, Loss of External Financing.”
The central bank went ahead to announce measures introduced to resolve the situation.
They were the “Gold Purchase Program to increase foreign exchange reserves; Special Foreign Exchange Auction for the Bulk Distribution Company’s (BDCs) to help with the importation of petroleum products; Bank of Ghana is entering into a cooperation agreement with the mining companies to provide BOG with the opportunity to buy gold as when it becomes available.
“The Bank of Ghana is supporting the banking sector with foreign currency liquidity to help meet the demand for external payments. The recently approved USD750,000,000 Afrexim loan facility by Parliament, once disbursed, will boost the foreign exchange position of the country and help restore confidence.”
The recently signed 1.13billion dollar Cocoa Syndicated loan was also a measure to shore up the Cedi, the BoG added.
