Cedi crashes against major foreign currencies

The local currency, cedi has depreciated sharply against major foreign currencies on the forex market in the past week.

As at Saturday, 22 August 2015, a dollar was selling at GH¢4.37 and buying at GH¢4.20 on the forex market.

One British Pound was selling at GH¢6.86 and buying at GH¢6.59.

The Euro was also selling at GH¢4.94 and buying at GH¢4.74.

At the interbank exchange level, a dollar was buying at GH¢4.0172 and selling at GH¢4.0212.

The British Pound was selling at GH¢6.3016 and buying at GH¢6.2941 while the Euro was buying at GH¢4.5550 and selling at GH¢4.5588.

The cedi from 2012 has continuously depreciated against major currencies, a situation that affected every sector of the country’s economy.

The Bank of Ghana (BoG), in a desperate measure, instituted some forex measures to tackle the situation.

The measures did not work out as planned and the currency kept deteriorating.

The government secured an IMF bailout of some $900 million to strengthen the country’s economy.

As a new measure to address the situation, the Bank of Ghana (BoG) has been pumping some $20 million a day into the country’s economy.

That led to rapid appreciation of the cedi against major trading currencies.

Despite the assurances and claims, the depreciation scourge has resurfaced, casting into doubt the ability of the Bank of Ghana (BoG) to bring the situation under control.

Many economists expressed concern when the cedi began to appreciate as a result of $20 million that was pumped into the country’s economy by the Central Bank.

They predicted that the local currency would fall against the major trading currencies and hit close to GH¢6 to a dollar by close of year.

Dr. Osei Assibey, an economist and senior lecturer at the Economics Department at the University of Ghana, said “stability is what is needed.”

The apparent swing of the cedi like a pendulum up and down the economic ladder does not augur well for the economy,” he indicated.

He said the Bank of Ghana should set upper and lower limits within which the cedi should operate.