Business News of Saturday, 7 July 2012
The Bank of Ghana is optimistic the cedi will stabilize by December following the introduction of a number of measures.
The Bank says the measures will help arrest the continuous free fall of the cedi.
The central bank earlier in the year used over a billion dollars of its reserves to attempt a rescue of the cedi from free fall. Despite the moves however, the cedi continues to depreciate against the dollar.
According to figures from the Bank of Ghana, the cedi depreciated by 15.1 percent against the dollar during the first five months of this year compared to the 1.9 percent depreciation in the same period of last year. The figure represents a more than 5 percent increase than some analysts had predicted early this year.
The Corporate and Investment Banking Division of Absa Bank Ltd, ABSA capital in its outlook for the cedi this year predicts the currency will continue to weaken over the coming months.
Governor of the Bank of Ghana, Paa Kwesi Amissah Arthur however says the cedi is likely to stabilize in December and begin appreciating against the dollar soon after.
"Basically the nominal depreciation that has taken place in the last six months has put us back... In terms of the real exchange rate a couple of years ago, our outlook is also that there is going to be a short period of turbulence but in the next six months you are going to see some stability", he said.**