Prime News Ghana

Cedi's strong recovery will be sustained throughout the year - Ken Ofori Atta

By Justice Kofi Bimpeh
Ghana Cedi notes
Ghana Cedi notes
facebook sharing button Share
twitter sharing button Tweet
email sharing button Email
sharethis sharing button Share

Finance Minister Ken Ofori Atta says the Cedi's strong recovery in the first two months of 2020 will be sustained throughout the year.

The cedi has witnessed record appreciation in the first two months of the year against the dollar. This has been described by some market watchers as unusual, others also believe it is the less demand for the dollars for business in China because of the Coronavirus.

According to Bank of Ghana’s (BoG) latest Summary of Economic and Financial Data report for the month of January, the cedi has found a renewed strength and has so far held its own to make gains on its trading partners.

It added that the cedi in the first month of the year has so far appreciated 0.3 percent against the dollar, made a 1.9 percent gain on the British pound while recording a 2.3 percent appreciation against the Euro.

The cedi is currently trading at 5.32827 to a dollar.

READ ALSO: Cedi is world's best performing currency against the dollar in 2020

Ken Ofori Atta in an interview with Joy FM said his projection of a strong recovery is based on sound regulatory actions by the Bank of Ghana.

"I'm very confident that the cedi is going to hold even though it's an election year as you know we also moving towards the royalties ITO which will bring some more resources maybe around some 300 million into our coffers, I think I look to the year as even much calmer than previous years to get our road-going.." 

Bawumia still maintains they have 'arrested' the depreciating cedi

Dr. Bawumia has maintained that the NPP government has arrested the rapid depreciation of the cedi.

According to him, the depreciation figures clearly show that they have done a good job in reducing the rate of the cedi depreciating against other trading currencies especially the dollar.

Addressing a town hall meeting in Kumasi to outline the successes chalked by the NPP government based on the promises made during the 2016 general elections, Dr. Bawumia said the floating exchange regime used by the country will never allow a fixed exchange rate.

Explaining the factors that influence the exchange rate, Dr Bawumia said "at basic level, it's influenced by factors such as relative demand and supply for foreign currencies, .... generally it reflects the purchasing power of one currency to another, countries have a choice to two types of exchange rate regimes, you can have a fixed exchange regime or the floating exchange regime where the exchange rate is determined by forces of demand and supply. Ghana operates a floating or managed a floating regime and for that reason in Ghana, we should never expect that the exchange rate will be fixed. It will fluctuate depending on demand and supply, what policymakers can do it to control the rate of depreciation or appreciation of the currency through sound policy."