Business News of Friday, 23 November 2012

Source: XYZ

Cedi to stay strong in election year - Duffuor

Finance Minister, Dr. Kwabena Duffuor is predicting an 11 per cent depreciation of the Ghana cedi to the US Dollar by December 31 this year.

Historically, the local currency depreciates rapidly to the American currency few months to the end of an election year.

But the situation is different this time around although the Ghana Cedi almost lost 20 per cent of its value to the US Dollar during the first five months of the year.

Dr. Duffuor told XYZ BUSINESS that measures put in place by the government and the Central Bank, including the re-introduction of the short-dated securities have yielded the expected benefits.

“All the measures are working. Yes the first six months of the year the cedi was wobbling but from August, it’s been not only stabilising but appreciating,” he said.

He said the government expects the cedi to appreciate by at least one per cent by the close of the year.

In a related development, analysts are optimistic a declining inflation and improved foreign reserve position of the Central Bank will strengthen the purchasing power of the Ghana Cedi.

It has presently depreciated by about 14 per cent this year against the Dollar.

Professor Felix Asante, Director of the Institute of Statistical, Social and Economic Research, also affirmed that the Cedi will remain stable to the Dollar for the rest of the year.