By Kofi Ahovi
Industry analysts have expressed mixed expectations to the performance of the cedi to the major trading currencies in the second quarter of this year.
While one school of thought predicts a marginal decline for the Ghanaian currency, saying the cedi is likely to depreciate slightly against the major trading currencies in the second quarter of this year, others believe the cedi is likely to appreciate during the same period.
According to data from the Ghana Bankers Association the cedi depreciated against the dollar, pound and the euro during the first quarter of this year. The cedi started the year at GHc1.4559 and closed at Ghc1.5182 against the US dollar on April 14, 2011 representing 4.28% depreciation. With the British pound, it started the year at GHc2.2409 and closed GHc2.4823 representing 10.77% depreciation, while the Euro traded against the cedi at GHc1.9454 at the start of the year and closed at GHc2.2015 by mid April representing 13.16% depreciation for the same period.
The head of research at First Atlantic Merchant Bank, Lambert Keriba, speaking to Business Week observed that the anticipated decline in the cedi would be, in part, as a result of the marginal fluctuation in the price of crude oil on the international market.
He added however that the positive performance of the gold and cocoa the country’s main exports, on the international market would largely support the country’s foreign exchange reserve thereby ameliorating any depreciation of the cedi against the other currencies.
He further stated that expected changes in inflation would not have any major influence on the cedi “since it would be in the single digit zone”. This notwithstanding Keriba emphasized that industry stakeholders are confident in the cedi.
Keriba predicted that the cedi may fall further during the third and fourth quarter of the year due the expected importation of goods for the Christmas celebration.
The managing director of Stanbic Bank, Alhassan Andani, also expressed confidence in the cedi saying “From the beginning of this year has it been significant appreciating steadily against the other major currencies.”
“Cocoa and gold are doing well on the international market and these have great impact on the cedi, in that regard we expect the cedi to maintain its appreciation against the currencies the next quarter”
The cedi is expected to see some stability throughout the whole of this week as demand for dollars by importers remains low and local companies use cash to pay their first-quarter taxes, Jacob Brobbey, a currency trader with Barclays Bank of Ghana Limited, said.
The currency gained 0.2% to 1.5120 per dollar, from last Wednesday’s close of 1.5145, according to data compiled by Bloomberg. The cedi traded between 1.5110 and 1.5195 since April 4. It depreciated to a record low against the dollar of 1.5725 on February 2.
Industry analysts have expressed mixed expectations to the performance of the cedi to the major trading currencies in the second quarter of this year.
While one school of thought predicts a marginal decline for the Ghanaian currency, saying the cedi is likely to depreciate slightly against the major trading currencies in the second quarter of this year, others believe the cedi is likely to appreciate during the same period.
According to data from the Ghana Bankers Association the cedi depreciated against the dollar, pound and the euro during the first quarter of this year. The cedi started the year at GHc1.4559 and closed at Ghc1.5182 against the US dollar on April 14, 2011 representing 4.28% depreciation. With the British pound, it started the year at GHc2.2409 and closed GHc2.4823 representing 10.77% depreciation, while the Euro traded against the cedi at GHc1.9454 at the start of the year and closed at GHc2.2015 by mid April representing 13.16% depreciation for the same period.
The head of research at First Atlantic Merchant Bank, Lambert Keriba, speaking to Business Week observed that the anticipated decline in the cedi would be, in part, as a result of the marginal fluctuation in the price of crude oil on the international market.
He added however that the positive performance of the gold and cocoa the country’s main exports, on the international market would largely support the country’s foreign exchange reserve thereby ameliorating any depreciation of the cedi against the other currencies.
He further stated that expected changes in inflation would not have any major influence on the cedi “since it would be in the single digit zone”. This notwithstanding Keriba emphasized that industry stakeholders are confident in the cedi.
Keriba predicted that the cedi may fall further during the third and fourth quarter of the year due the expected importation of goods for the Christmas celebration.
The managing director of Stanbic Bank, Alhassan Andani, also expressed confidence in the cedi saying “From the beginning of this year has it been significant appreciating steadily against the other major currencies.”
“Cocoa and gold are doing well on the international market and these have great impact on the cedi, in that regard we expect the cedi to maintain its appreciation against the currencies the next quarter”
The cedi is expected to see some stability throughout the whole of this week as demand for dollars by importers remains low and local companies use cash to pay their first-quarter taxes, Jacob Brobbey, a currency trader with Barclays Bank of Ghana Limited, said.
The currency gained 0.2% to 1.5120 per dollar, from last Wednesday’s close of 1.5145, according to data compiled by Bloomberg. The cedi traded between 1.5110 and 1.5195 since April 4. It depreciated to a record low against the dollar of 1.5725 on February 2.
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