The cedi should begin its losing streak against the dollar from next month (October) if nothing is done to stem the situation.
This is the caution from currency analysts.
Their arguments are premised on the potential rise in the demand for the dollar by importers and vendors ahead of the festive season.
Checks from the Bank of Ghana have shown that the cedi has maintained a stable streak of 4 cedis 40 pesewas to the dollar, over the last two weeks.
As at Wednesday, September 13 2017, the cedi was trading at 4 cedis 41 pesewas to the dollar.
As at the beginning of the year, the cedi was trading at 4 cedis 20 pesewas to the dollar.
This continued steadily until it reached its peak at 4 cedis 46 pesewas in February 2017.
The General Manager of Treasury at HFC Bank, Joseph Nketsia, explained that the relative stability of the cedi for a greater part of August 2017 is largely because of the low demand for the currency by importers, traders, among others.
This he says has also been backed by the assurances of the potential increase in the supply of dollars following the proceeds from the 1.3 billion dollar cocoa syndicated loan.
“Traders are confident that the central bank has enough dollars available especially now with the dollar syndicated COCOBOD loan of 1.3 billion dollars. So they are rest assured that when you need dollars, the central bank will make it available that is why the cedi has been relatively stable on the market”, he said.
The Bank of Ghana’s dollar auction for the first quarter of this year helped to stabilize the situation in March 2017 after failing to do so in January and February 2017.
Also, figures from the central bank indicate that as at July this year, the cedi had depreciated by 3.9 percent to the dollar while it depreciated by 11.8 and 8.7 percent to the Euro and British Pound respectively.
But with about three months to the end of the year, the currency analysts fear the rise in demand by importers could trigger another round of losing streak of the cedi.
For Mr. Joseph Nketsia, the development is inevitable as importers of consumer products for the festive season have paid little heed to advice not to be speculative in their purchases but make demands as and when appropriate.
“When we enter the fourth quarter which starts in October, most traders will be bringing goods for Christmas and that is when they buy dollars and place orders especially those who are doing advance payment”
He added, “That is why as we enter the next month we are likely to see foreign currency and therefore new prices will be coming up but I can assure you the central bank has enough foreign exchange resources to take care of the market”.
Source: Adnan Adams Mohammed