Cedi Appreciation Only Short Term, Dollar Will Rise Again – Economist
Economics lecturer at the University of Ghana, Dr Priscilla Twumasi Baffour, has stated the reasons behind the stabilization of the Ghana cedi against the dollar lately.
This, according to Dr Baffour, is because of the less demand of the dollar by merchants during the happy season.
Speaking on Happiness News AM Show, she noted the cedi is performing best because of the influx of travelers and other visitors in the nation yet warned of likely insignificant repeat should the demand for the dollar increase early one year from now.
“I believe that there were a ton of speculations that prompted the significant increase in the demand for dollar at the time the dollar ascended that sharply. In any case, that said based on the fact that the nation is presently engaged and has made an advancement and engagement with the IMF,” she said.
“Although speculative activities are coming down and rightfully so a ton of merchants have already placed their orders so there’s very little demand and individuals are also coming home for the happy season and they are also bringing in a ton of forex. So all these culminate into the seemingly solid performance of the cedi against the dollar.”
“Indeed, we do not have control over the dollar and so as long as at any point in time demand exceeds supply then it means that the price of the dollar will go up.”
Dr Baffour added that the cedi appreciation can be sustained when the economic fundamentals are moved in the right direction.
“To a large extent it will be sustained when we find that the economic fundamentals are moving in the right direction. Until we have a bit of certainty within this environment, we would say that any gains that we are seeing in the short medium term.”
The Ghana cedi in the past week has continued its rally against the unfamiliar monetary forms especially the US dollar.
As of today, December 14, the cedi has gained 5.6% value against the US dollar, presently selling between GH¢10.70 to GH¢11.28 in some forex bureaus and commercial banks.
READ:How To Pay Just GHS12 a day for a brand new Samsung Phone in Ghana
This put the cedi as the most grounded performing money against the American ‘greenback’ in December 2022.
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