Alan Kyerematen
THE CEDI depreciated against the dollar this week, trading at 6.107 compared to 6.099 at last week’s close.
AZA Finance, Africa’s largest non-bank currency broker by trading volume at over $1 billion annually, disclosed this in its latest update on developments in the continent’s foreign exchange markets.
It commented “We anticipate a more positive mood in the foreign exchange market, with pressure on the cedi likely to ease in the coming days.”
In a preceding update, it mentioned, “As we move into the fourth quarter, the syndicated $1.5 billion cocoa loan should start being disbursed, which in turn should prevent the cedi from experiencing the same scale of weakness seen in the previous quarter. Against that backdrop, we expect the cedi to maintain these levels in the near term.”
Trade and Industry Minister, Alan Kyerematen, has stated that the country needs to increase its export capacity through industrialisation to create jobs.
It is against that backdrop that Tullow Ghana has taken a developmental step by acquiring the first Ghanaian flagged marine vessel to boost capacity in the offshore oil and gas industry, and reduce dependence on imports.
A $75 million foreign exchange auction recently gave the local currency a temporary reprieve before the increased dollar demand resumed the pressure.
Dr Ernest Addison, Governor of the Bank of Ghana, reacting to the recent behaviour of the local currency, noted, “The country’s higher sovereign spread has not shifted foreign investor behaviour as net monthly purchases of securities on both the debt and equity markets remain relatively favourable. In the outlook, rising interest rates in advanced economies on account of tapering may pose some risks. However, the strong reserve build-up and foreign exchange inflows from the recent SDR allocation and the expected syndicated cocoa loan proceeds should help to cushion currency pressures in the near-term.”
BY Samuel Boadi