• The cedi ended the third quarter of 2021 with a deprecation of 1.81% to the US dollar.
• Some economists have projected a well-anchored cedi for the rest of 2021
Ghana’s local currency is projected to record a relative stability against major trading currency, the US dollar in the fourth quarter of 2021, an economist has revealed.
Despite expectations of the local currency, set to witness some pressures during the festive season of Christmas, the cedi is expected to remain stable for the period due to a number of reasons.
Senior Economic Analyst at Databank, Courage Martey in an interaction with Joy Business explained the stability will be a result of the US$1.5 billion Cocoa Syndication loan of which US$750 million is anticipated to hit the account of the Bank of Ghana during this week.
“As we head into the final quarter of 2021, we are quite assured of continued relative stability but with a depreciation that will occur at a controlled or modest pace because already, we have a strong reserve buffer in excess of five months of import cover. And from October [2021], we should start to see the tranche disbursement of the US$1.5 billion Cocoa Syndicated facility which will strengthen the cedi to see out the rest of this year. So generally, we are very positive about the cedi,” Martey explained.
Martey was however cautious that the inflows from the cocoa syndicated loan may not fully translate into appreciation of the cedi in the fourth quarter of 2021.
“We do not expect that these inflows [cocoa syndicated loan] will translate into appreciation in the fourth quarter of this year. However, we think it will likely mitigate any potential shocks on the currency,” the senior economist pointed.
Meanwhile, the cedi according to data from the central bank ended the third quarter of this year with a modest deprecation of 1.81% to the dollar.
This was however lower than the 2.96% depreciation earlier recorded during the same period in 2020.
The third quarter depreciation of the cedi is said to be the lowest performance of the local currency in about 20 years.
Some market analysts and economists have projected that the cedi is well anchored to withstand some anticipated shocks. Read Full Story
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