Cedi Records Marginal Appreciation Against Dollar

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The Ghana cedi has started recording some marginal appreciation against its major currency trading partner, the dollar on the market. Checks on the market show that on Thursday, March 14 the local currency did appreciate against the dollar by some 5% to trade at around GH¢5.60 compared to about GH¢5.90 last Tuesday and Wednesday.

Checks with some key banks in the forex market in the country confirms the marginal stability of the local currency on Friday, March 15, 2019 closing at around GH¢5.56.

Report by JoyBusiness, indicating its engagement with some treasurers and currency dealers and even persons close to the Bank of Ghana (BoG), has noted that, the development has largely been influenced by the resumption of some injection of dollar cash by the BoG last week, which some market players describe as significant.

BoG Governor, Dr. Ernest Addison

This was after the Bank of Ghana met the IMF’s program target which required it, to build dollar reserves up to a certain level for December 2018 ending date, making the BoG to now crossed its target.

However, sources say the market and some investors appear to have bought the assurance from the Finance Minister, Ken Ofori-Atta that the cedis will stabilize in two weeks and coupled with the parliamentary approval of the $750 million bridge loan from Standard Chartered Bank.

This has resulted in some customers selling dollars. All these development would increase dollar supply onto the market and this could help stabilize the cedi in the short term.

Earlier, the Bank of Ghana (BoG) mentioned that, it had pumped a minimum of $800 million to the country’s reserves to stabilise the cedi against major international currencies, especially the dollar.

The Head of Financial Markets at the central bank, Mr. Steven Opata, told the Daily Graphic that the accumulation of more dollars would help increase the net international reserve (NIR) to around $4 billion, enough to provide confidence in the system and help stabilise the free fall of the local currency.

Head of Financial Markets at BoG, Mr. Steven Opata

This was necessitated by depreciation of the cedi since January this year. Data from the central bank showed that the cedi has lost some 3.6 per cent of its value to the US dollar as the international investor community sold some of their investments in local securities and moved their funds overseas, partly causing the cedi to slide.

That caused some apprehension among the business community, prompting various private sector associations to urge the central bank to find a solution to the depreciation to help abate the impact on their operations.

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