Local currency crosses ¢10 to one dollar mark on retail market
The local currency has crossed the ¢10 to one dollar mark on the retail market.
A visit by Citi Business News to some forex bureau and banks within the capital shows that some are selling a dollar for 9 Cedis 98 pesewas whilst others are selling it for 10 cedis 10 pesewas
According to some of the forex bureau operators there is also a shortage of the dollar on the market. They also say that the situation is bad and could get worse in the coming weeks.
Data from the Bank of Ghana indicates that the Ghana Cedi has lost more than 25 per cent of its value year on year.
The deterioration of the local currency on the financial market risk is due largely to the uncertainty about Ghana’s fiscal outlook, despite interventions by the Bank of Ghana.
The situation comes barely a day after the Bank of announced an increase in the monetary policy rate by 300 basis points. This intervention according to the Central Bank is part of efforts seeks to tame soaring inflation and the fast-depreciating local currency.
Reacting to this situation, Economist, Courage Boti stated that it will take some time for the Interventions to materialize.
“Nothing has changed. It is still a matter of demand and supply. For over eight to nine weeks now, the Bank of Ghana has not done any spot market interventions. This you will say are residual demands on the market that are driving the rate higher. Until that backlog is cleared, some of these issues will linger.
Some of the interventions are not yet been done. So investors will be looking at your reserves that is at 7.6 billion and your reserves at 3.7 billion billion which is short of what it was in the past. These are the fundamentals that will continue to drive the market until something changes. Immediately, the decision by the Central Bank’s decision to raise the policy rate yesterday means it will take some time for liquidity to be mopped up. This will show in the gradual upward adjustment in the interbank interest rate. So it’s effect will come over time,” he said.
Source: Ghana Business
