Local Currency
Despite its stable performance against the US dollar for a considerable period of time, the local currency, the Cedi has begun depreciating in the past few days.
According to the latest summary of economic figures released by the Central Bank, the Ghana cedi depreciated by 4.6 percent (i.e. GH¢3.98) against the dollar as at 17th November, this year.
The figure represents an upswing from the 0.9 percent (i.e. GH¢3.83) by the end of the first quarter (March) this year.
On Monday, November 28, 2016, the local currency sold for (GH¢3.98) on the interbank forex market while it went for over GH¢4.10 at forex bureau in Accra and other parts of the country.
Commercial banks have indicated that the current marginal depreciation of the cedi could be attributed to high demand by retailers ahead of the Christmas season.
The treasury units of commercial banks explained that the desire of retailers to meet their payment obligations was responsible for increased demand, whereas there was not enough US dollars to meet the demand.
General Manager for Treasury at HFC Bank, Joseph Nketsiah, who spoke to Citi Fm, an Accra-based radio station, stated: “For the past two weeks, the cedi has come under intense pressure both on the interbank foreign exchange and forex bureaus, but most of the demand has come from the retail side. As people start selling their goods for Christmas, they are able to pay for them, especially for those traders deferred payments due to letters of credit granted them.”
Figures released by the Bank of Ghana (BoG) suggest the contrary i.e. that the local currency has rather been appreciating compared to the British Pound.
Mr Nketsiah said assertions that the upcoming general elections were to be blame for the marginal depreciation of the currency were untrue, adding that the cedi was not likely to go beyond GH¢4 to a US dollar on the interbank market by end of 2016.
The local currency has been losing value against the Euro for the past eight months.
By Samuel Boadi
samuel10gh@yahoo.com