Cedi doing better than in 2016, 2017 – GN Research

The value of the Ghanaian cedi this year is better than it was within the same period in 2016 and 2017, GN Research has revealed.

According to GN Research, the cedi has achieved this feat despite the current rate of depreciation.

“By 20th June 2016, the cedi had lost 2.83%, 2.86% and 6.88% of its value against the dollar, the pound and the euro, respectively and 3.45%, 5.61% and 9.07% by 20th June 2017. As at 20th June 2018, the Cedi had depreciated by 1.11% against the dollar but gained 1.32% and 2.38% against the pound and the euro, respectively”.

General Manager of GN Research, Samuel Kofi Ampah, stated in a publication on their mid-year budget review released on Monday, 25 June 2018.

GN Research attributed the improved performance of the cedi primarily to in-flows of foreign exchange from foreign investors as a result of growing interest in government’s longer dated debt instruments.

“The recent tax reforms such as the abolishment of VAT/NHIL on financial services, domestic airline fares and real estate sales among others have also improved the investment climate leading to more foreign exchange inflows,” the release added.

However, GN Research pointed out that “more policies are required to maintain the value of the cedi. This is because these investors are seeking profit and are likely to transfer their investments to more profitable and less risky instruments as is happening now”.

“For instance, the interest on the US short-term Treasury bill reached nearly a decade high of 1.895% on 21st May 2018. Also, the yield on the US 10-year Treasury note has been on the rise, reaching 3% since 2011. Hence investors are disinvesting the Government of Ghana instruments for the US treasury bills and notes,” the release noted.