Cedi on free fall again

The local currency has begun registering losses against major international currencies again, and some analysts believe it might hit Ghc5.00 to a dollar by the end of the year if the situation is not managed early.

Records from the market rate (forex bureaux), yesterday showed that while a dollar was selling at Ghc3.86 and buying at Ghc3.62, a pound was selling at Gh5.69 and buying at Ghc5.32.

Also, one Euro was selling at Ghc4.09 and buying at Ghc3.83 while one CFA was selling at Ghc0.006 and buying at Ghc0.006.

At the interbank level, a dollar was selling yesterday at Ghc3.60 and buying at Ghc3.59.

One British Pound was selling at Ghc5.29 and buying at Ghc5.28. One Euro was selling at Ghc3.83 and buying at Ghc3.82. The CFA was also selling at Ghc0.0058 and buying at the same price.

Importers would be compelled to double their prices in the face of the current development, and if the IMF deal does not come in handy, the situation could deteriorate.

The cedi depreciated by 1.3 percent in January 2015 compared to 7.8 percent a year ago.

Standard Chartered Bank, it would be recalled, predicted a Ghc4.20 rate depreciation against the U.S dollar by the end of the year. The prediction was contained in a report issued by the research wing of the bank responsible for Africa.

The report, authored by the bank’s head of Africa research, Razia Khan, gave the outlook for eight economies in Africa, including Ghana, Nigeria, and South Africa.

Ms. Khan maintained that the Ghc4.20 could be revised if Ghana secures a programme with the IMF.

The Ghana Cedi recorded one of its worst depreciation in 2014. The cumulative depreciation of the cedi for 2014 was 31.2 percent compared to 14.5 percent in 2013.

It depreciated by 26.7 percent between January and June 2014 but remained relatively stable during the second half, depreciating by 4.5 percent.

The Us Dollar increased to Ghc3.63 in March from Ghc3.50 in February 2015.