Currency dealers project cedi stability in March
Forecasts by the Association of Financial Market operators have pointed March this year for the cedi to begin stabilizing against the US dollar.
The Association is made up of currency dealers at the commercial banks.
The cedi is said to have depreciated by some 4 percent against the dollar from the beginning of this year. The local currency is currently selling at GHC4.00 at the forex bureau.
President of Association, Othineal Kwanor, told Joy Business the basis of their projection is the favourable economic indicators.
“The economy is beginning to pick up, at least some stability is being seen now in the power situation and we hope that manufacturing which saw the biggest hit will begin to produce. Looking at it from the export side of things, if exports pick up then largely we might see some improvement in flow,” Mr Kwanor said.
Joy Business is also learning from the currency dealers that there has been a substantial increase in Bank of Ghana supply of dollars unto the market.
The dealers maintain that the cedi’s depreciation could have been very bad, without this intervention from the central bank.
Sources say the pressure on the Ghana cedi is also being influenced by demand for dollars by some businesses in the West African region, who come to Ghana to buy the dollars because it cheaper.
Meanwhile, fears that the cedi could be depreciating further in the coming weeks has resulted in some mad rush for dollars.
Checks with some commercial banks and forex dealers show that over the past one week, there has been a sudden increase in demand for dollars.
Sources say the challenges begun from January 4 this year.
At that time, it was believed that the huge demand was basically due to the fact that most companies were demanding dollars to finance their imports.
However events over the past one week, shows that there is more to it than what has been initially reported.
Some firms Joy Business spoke to say that even though they do not need the dollars, fears that things could get out of hand is resulting in the mad rush for the US currency. This development, according to Economist Kwame Pianim, is worrying.
Joy Business understands there is usually not enough supply on the market, during this time of the year because most of the donor inflows and remittances are yet to come in.
Also there is some sort of temporary freeze in the huge inflows and funding for some projects at this time of year because of the uncertainty surrounding an election year.