Cedi to gain stability throughout 2021 - economist projects
Adnan Adams Mohammed
Ghana’s local
currency, the cedi, is expected to remain stable against major trading
currencies throughout 2021 according to the expert's projection.
Economist with
the Databank believes the stability of the local currency will be a result
of measures set in place by the Bank of Ghana to prevent a cedi depreciation.
The cedi, which
began the year selling at 5 cedis 76 pesewas, has remained strong so far
against the US dollar. However, there are concerns that it could come under
pressure when the global economy fully recovers from COVID-19 and imports pick
up.
“First of all,
it is based on the performance we saw last year and typically this financial
asset turns to move along with the sentiment of the market. Given the
performance that we saw last year, which was very impressive, the expectation
and the credibility of the monetary policy framework to continue to anchor
policy stability was already gained,” Courage Martey explained at a Pension
Strategy conference held in Accra.
“When we
started this year, the Bank of Ghana also published the forex forward issuance
calendar. They indicated that for the first quarter of this year the FX forward
auctions will be allotting US$50 million per weekly auction and after the
first quarter they will revert to a US$25 million allotments per by weekly the auction,” he pointed.
The Databank the economist added, “Now, one thing to note is that this allotment is higher than
what will be happening after Q1 and it’s a recognition of the Bank of Ghana’s
commitment to currency stability in a typically difficult period for Ghana
cedi.”
0 comments: