As the cedi continues to show some weakness against the dollar, there are calls from observers to halt the rate of depreciation the currency to stabilize prices.
The local currency since the beginning of the year has seen over 8.6 percent depreciation, causing currency analysts to question measures put in place to stabilize the cedi.
The cedi, as at December 2018 was trading against the dollar at 4 cedis 86 pesewas. The currency then begun to experience a drop by the third week in January.
Checks by Citi Business News at forex bureaus on Friday [March 1, 2019] indicated that the cedi has weakened to 5 cedis 33 pesewas.
This is more than 8.6 percent depreciation since January this year.
In Mid December 2018, the Economist Intelligence Unit (EIU) predicted that the local currency will hit 6 cedis 39 pesewas by 2023.
According to the Economist Intelligence Unit, its forecast was premised on the cedi remaining prone to periods of volatility, given a dependence on commodity prices and broader decline in investor sentiment towards emerging markets.
In February 2019, President Akufo-Addo expressed concerns over the depreciating rate of the currency assuring that government will do all it can to fix it.
Speaking at the commissioning of the Fujian Sentuo Ceramics Company at Kpone in Accra, on February 27, President Akufo-Addo said “I am extremely upset and anxious about it, but I want to assure you that all efforts are being made to arrest the decline and restore the cedi to stability.
Meanwhile, officials at the Bank of Ghana say almost all the macro-economic indicators are pointing in the right directions.
Head of Financial Markets at the Bank of Ghana, Stephen Opata said the depreciation is partly due to external factors due to increases in the U.S interest rates which is causing investors to move their funds to invest abroad. This he says has caused the demand for dollars to go up.
Already importers who are lamenting over the rate of depreciation have warned that they will have no other option but to pass on the cost to consumers.
Source: Citi Business News.
