Cedi stabilizes against major currencies

The Cedi was relatively stable against almost all the major currencies in both the inter-bank and the forex bureaux markets during the first half-year of 2001.

Mr Yaw Osafo-Maafo, Minister of Finance announcing this in Parliament on Thursday said the stability of the cedi "was in contrast with developments in 2000 when the cedi depreciated sharply and continuously against the major currencies".


The Minister who was presenting mid-year review of the budget statement and economic policy of the government, said in the inter-bank market, the cedi/dollar exchange rate increased from 7,047.65 cedis at the beginning of the year to 7,227.00 at the end of June.


It indicated a depreciation of 2.5 per cent for the half-year, which was lower than the depreciation of 37.6 per cent recorded for the corresponding period of last year, he said.

Mr Osafo-Maafo said the reasons for the stability of the cedi exchange rate included the prudent fiscal and monetary policies of the NPP Government and the increased confidence of Ghanaians in such policies.


"Furthermore there was a reduced demand for foreign exchange to service bilateral debts as a result of Ghana's decision to access the Highly Indebted Poor Countries (HIPC) initiative.


"Indeed, as Ghanaians become more certain about the direction of government policies, it is expected that confidence will grow and discourage the extrapolative expectations of the depreciations of the cedi which also feed back into price increases", the Minister said.