Business News of 2014-01-22

Government to check cedi depreciation

Finance Minister Seth Terkper is promising to strengthen existing foreign exchange laws to help halt the free fall in the value Ghana’s currency.
The promise follows a directive by the Vice President, Kwesi Amissah Arthur that the finance ministry together with the Bank of Ghana must work fast to save the local currency for further depreciation.
Mr. Terkper tells Joy Business the new regulations together with enforcement of the laws can help stabilize the local currency. “The governor and his team are already preparing some legislation that would go to parliament to strengthen their regulatory control of the currency.”
For many, the directive could not have come at a good time, as the local currency is going through some difficulties. But the challenge for most currency watchers is, whether this directive would result in reviewing the measures introduce to check the cedi's free fall, since ones already introduced are yet to get the desired result.
The Ghana cedi has already seen about 3 percent depreciation for 2014 after going down by 17 percent last year. Some analyst have predicted that the cedi would depreciate further in the coming months and would end this year recording its biggest drop in value against the dollar since the redenomination in 2007.
The current woe of the cedi has contributed to inflation for December last year hitting 13.5 the highest since 2010, as well as recent increases in petroleum products.
Currency Expert, Kofi Ampah believes that another measure that can help manage the situation is checking government's expenditure and making the Ghana cedi attractive for businesses and individuals.
If the predictions by some of the currency watchers that the cedi would record its worst depreciation this year is anything to go by then one must be prepared to pay more for petroleum products, utility tariffs, and goods and services.