Adnan Adams Mohammed
Ghana’s local currency, the cedi, is expected to remain stable against major trading currencies throughout 2021 according to the expert’s projection.
Economist with the Databank believes the stability of the local currency will be a result of measures set in place by the Bank of Ghana to prevent a cedi depreciation.
The cedi, which began the year selling at 5 cedis 76 pesewas, has remained strong so far against the US dollar. However, there are concerns that it could come under pressure when the global economy fully recovers from COVID-19 and imports pick up.
“First of all, it is based on the performance we saw last year and typically this financial asset turns to move along with the sentiment of the market. Given the performance that we saw last year, which was very impressive, the expectation and the credibility of the monetary policy framework to continue to anchor policy stability was already gained,” Courage Martey explained at a Pension Strategy conference held in Accra.
“When we started this year, the Bank of Ghana also published the forex forward issuance calendar. They indicated that for the first quarter of this year the FX forward auctions will be allotting US$50 million per weekly auction and after the first quarter they will revert to a US$25 million allotments per by weekly the auction,” he pointed.
The Databank the economist added, “Now, one thing to note is that this allotment is higher than what will be happening after Q1 and it’s a recognition of the Bank of Ghana’s commitment to currency stability in a typically difficult period for Ghana cedi.”
