Historically, the Ghanaian Cedi reached an all-time high of 5.60 against the dollar at some forex bureaus in March 2019 and a record low of 0.90 in July of 2007.
The currency started 2019 on the Central Bank’s Interbank Foreign Exchange Market on 2nd January selling at GHC 4.83 to a dollar, losing value consistently to end January at GHC 4.95.
The losing trend continued through February and March, beginning the second month at GHC 4.95, hitting the GHC 5 Cedi Mark by February 9th.
After ending February on the Interbank Foreign Exchange Market selling at GHC 5.16 to a dollar it rose to GHC 5.24 by March 12 maintaining that position for about two weeks before experiencing its biggest gain of 8 pesewas against the dollar to sell at GHC 5.16 pesewas on March 22, 2019.
Government and some analysts have expressed optimism the cedi will appreciate further.
While admitting that the current steps being taken by government are positive, Banking Consultant Dr. Richmond Attuahene however stated that the strengthening of the Cedi can only be sustained when long term measures are used to develop the structural needs of the economy.
“In the short-term we expect it to come down but in the medium-term to long-term like a year and a year after, it will still crawl back to the position it has been,” he warned, adding that “the factors have not been addressed”.
He stated that borrowing to support the local currency is not sustainable.
“I’ve always been saying that we need to identify exportable items or strategies that we want to shore-up the currency. The only solution for this nation is to look at the export base and begin to think about what we can add to the cocoa rather than the oil.”
Dr. Attuahene however stressed that Ghana will fail to achieve long-term currency sustainability by depending on currency support from proceeds from bonds and other loans.
“It is not a proper strategy for the nation. You defend borrowing to support your currency? It is never done anywhere. You must export more and then import less to be able to have reserves. So if Ghana as a nation wants to stop this downward trend that brings panic we need to have a proper export development strategy, implementable strategy otherwise come the next one year we will be in the same shoes. We need to have a proper strategy for the non-traditional exports like pineapple, salt, cashew and soya. To me it is the easiest way to insure the currency.”
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