We won’t see much appreciation of Ghana cedi – Standard Chartered

The Ghana cedi is not expected to see much appreciation in the coming weeks, according to Standard Bank.

In an email response to ghanabusinessnews.com on the cedi’s appreciation in the last couple of weeks after depreciating over a long period against the US dollar, the Financial Markets of Standard Chartered Bank Ghana said “We seemed to have bottomed out now and should not see much appreciation going forward. Our expectation of the seasonal foreign exchange flows in the last quarter of the year would give additional support to the currency, coupled with the potential issuance of the Eurobond,”

According to the Bank, the cedi’s appreciation is good in so far as this appreciation leads importers to return to the market to pay off their import bills, the country should see some pick up in commerce.

The Bank is of the view that if the currency’s appreciation heads off inflation through its impact on petroleum prices, “We should see some pick up in the service sector as consumer’s purchasing power increases.”

On why the Bank of Ghana exchange rate is lower than the international market rates, for example the Bloomberg rate, Standard Bank said the cedi trades offshore and most often at  a wide disparity from what is actually done onshore.

“Bank of Ghana daily rates are an average of all the trades that have happened onshore, through local bank books and they are realistic in so far as they represent a market average,” it said.

By Emmanuel K. Dogbevi