The Deputy Managing Director of Societe Generale Bank, Ghana, Ernest Kuetche, has urged the government to keep the local currency stable against major trading currencies such as the US dollar.
Despite its constant struggles, the local currency, according to the Bank of Ghana (BoG), has appreciated about four per cent in value against the dollar since the start of this year.
Speaking to the media after presenting vehicles to three winners of its 2019 “Deposit and Win” promotion, Mr Kuetche urged the government to continue its prudent policies to ensure the cedi’s performance is sustained, even beyond the election year.
“I think the government has already taken good measures on this. I think it is the reason why we believe it has helped stabilise the cedi. In 2019, the depreciation was quite significant. It was quite high. In the first two months of 2020, we have seen some appreciation of the cedi,” he said.
“This is overall a good stabilisation. The key concern is the fact that always in election years there is a bit of uncertainty. But from what we have seen in the first two months of the year, it doesn’t seem to be the case. If the government continues in the same direction, as the Bank of Ghana, I have no doubt things will continue to have a positive outlook,” he added.
Cedi’s performance
The cedi ended the month of February 2020 with an appreciation of about 5.75 per cent to the US dollar on the interbank market.
According to the Bank of Ghana’s Summary of Economic and Financial Data, the cedi in the first month of the year appreciated 0.3 per cent against the dollar; made a 1.9 per cent gain on the British pound; while recording a 2.3 per cent appreciation against the Euro.
This is unlike in previous years where it depreciated, sometimes a rapid fall.
The cedi also appreciated by 4.52 per cent at the forex bureau.
This performance is supported by the ongoing BoG interventions on the spot and forward markets, coupled with weak importers demand for foreign exchange on the market.
The foreign exchange supply-side was also supported by foreign portfolio investment flows to high-yield cedi securities.
However, in the last three trading days, there were some losses of the cedi against the dollar as foreign investors limited their risk exposures in the face of coronavirus spread across international borders.
The renewed risk-off mode of foreign investors appears to have revived offshore portfolio demand for foreign exchange coupled with the thinning supply of foreign exchange.
Presently, a US dollar can be bought for GHS5.29 on the interbank market and GHS5.37 at the forex bureau.
SOURCE: Daily Statesman
