The Ghana cedi strengthened in value against the dollar almost a day after the government launched the Debt Exchange Programme.
The local currency also improved in value against the other major foreign currencies, the pound and the euro.
It is being sold by forex bureaus at an average of ¢13.70 to the American ‘greenback’. It is also going for ¢14 to the euro and ¢16.70 to the pound.
It is, however, unclear why the cedi gained value against these major international currencies.
But some market watchers and analysts may attribute it to the Debt Exchange Programme as the government defined the parameters of the programme to pave way for a programme from the International Monetary Fund.
The local currency had remained relatively stable, particularly to the dollar in recent weeks.
It saw a week-on-week appreciation of 3.12 per cent against the dollar, 0.88 per cent to the pound and 3.79 per cent versus the euro on the retail market.
It has however depreciated by a little over 50 per cent since the beginning of the year.
Economist, Prof. Peter Quartey is hopeful that the Ghana Cedi will strengthen further against the major foreign currencies.
According to Prof. Quartey, this is highly probable because of the government’s intervention that has yielded the recent stability of the Cedi.
He predicts the economy will soon witness a positive outlook given the measures instituted by the government to tackle the depreciation of the Cedi and rising inflation.
“I see some self-correction happening”, he told Umaru Sanda Amadu on Eyewitness News.
The Ghana Cedi has been under pressure this year but recently, it has seen some cumulative gains as the dollar is currently being traded to the Cedi at an average rate of about GH¢11.
The Cedi declined by over 50 per cent in value against major currencies making it the worst-performing currency globally.
This forced government and the Central Bank to begin monitoring inflation developments by responding appropriately to contain the price pressures.
These were evident in the revised Monetary Policy among measures triggered to contain the inflationary pressures.
“The Bank of Ghana Monetary Policy and the supply of dollars to the OMCs are also helping in terms of the pressure on the exchange rate as well as the ban on the supply of foreign currency for the import of certain commodities. So it is a combination of factors accounting for the relative stability of the change rate”.
Prof. Quartey also, the Director of the Institute of Statistical, Social and Economic Research (ISSER) intimated that the totality of these measures coupled with the government’s deal with the International Monetary Fund is to account for the relative appreciation of the local currency.
“The rate of depreciation we saw was not normal. We hadn’t seen that in a very long time. The loss of credibility in the current and the local economy made people change every Cedi they had into dollars as a store of value. But the program from the IMF and the debt exchange itself are sending positive signals to the market”.
“I am very confident and hopeful that [it is going to be better] especially with the IMF deal that is going to bring in US$ 3 billion then the other bilateral donors will give us loans at very concessional rate and that will bring in more dollars into the system. I also expect the inflation rate to go down”, he further stated.