Courage Kingsley Martey, a Senior Economic Analyst at Databank
Courage Kingsley Martey, a Senior Economic Analyst at Databank

A Senior Economic Analyst at Databank, Mr Courage Kingsley Martey, has said the cedi is

likely to end the year at GH? 3.9 to the dollar.

He said current economic conditions and the anticipated revenue from the sale of bonds on the

international market would see the cedi stabilised against the dollar.

Courage Kingsley Martey, a Senior Economic Analyst at Databank
Courage Kingsley Martey, a Senior Economic Analyst at Databank
A statement issued by Mr Fidel Amoah, the Content Manager,

Lamudi Ghana, said Mr Martey made reference to a databank research

that had earlier in the year forecast the cedi to float between GH?

3.9 and GH? 4.3 to a dollar.

Mr Martey said: ?The expectation was that the cedi would end the

year between GH? 3.9 and GH? 4.3 maximum to the dollar.

?However, given the recent developments on the market and the

expected inflows, for the second half of the year, we will lean

towards the lower band of GH? 3.9 to a dollar by the end of the

year?.

He said the Central Bank?s daily release of $ 20 million in

June in effort to stabilise the cedi led to a sharp appreciation

against the major foreign currencies.

However, in the past few weeks, the cedi had seen slower

depreciation and more stability.

Mr Martey said he believed that the Central Bank?s

intervention could be a leading factor and noted that expected

inflows from the Eurobond sale and COCOBOD?s syndicated loan

facility were two factors that would ensure the stability of the

local currency.

?The cedi will see more stability in the second half of the

year due to COCOBOD?s expected loan facility of $ 1.8 billion and

the Government?s Eurobond sale expected to rake in $ 1.5 billion,?

he stated.

?This increased inflow of dollars will support Ghana?s reserves

position, allowing the Bank of Ghana to smoothen volatility on the

foreign exchange market till at least the end of the year?.

Mr Martey said that although these interventions would

stabilize the local currency in the short-term, more needed to be

done to ensure long-term stability.

The economic analyst hinted that a repeat of the cedi?s

depreciation could occur in the first half of 2016 due to inherent

challenges.

The biggest challenge, he said, was the country?s balance of

payment deficit and election uncertainty.

In the first quarter of this year, the country?s balance of

payment deficit was $850 billion.

This, he said, led to a shortage of foreign currencies on the

market, culminating in the sharp depreciation of the cedi in the

first half of the year.

Mr Martey said there was the need to increase exports through

economic diversification, while adding more value to the country?s

products to ensure that external vulnerabilities were reduced.

He noted that the cedi?s appreciation against the dollar led

to price reductions in fuel products but expressed doubts about any

significant effect on demand in the short-term.

He said this was because mortgage lenders were unlikely to

reduce prices, which could see them post losses instead of profits.

?In the short-term I don?t see any increase in the demand for

real estate,? he said. ?Any available mortgage right now will

include a higher exchange rate so that pricing regime cannot be

reduced within a space of three-week cedi appreciation.

?What they would want to do is to recover the cost they have

incurred over the first six months of the year before looking at

adjusting their prices again?.

The Managing Director of Lamudi Ghana, Ms Akua Nyame-Mensah

said: ?The cedi?s stabilisation is essential. Businesses have not

been able to adequately plan all year and have been spending on

unbudgeted expenses.

?As a result of a more stable currency, mortgages would become

more accessible. This has a positive effect on the economy because

developers and mortgage lenders are to meet their financial

objectives while the housing deficit is reduced.?

Source : GNA/newsghana.com.gh

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