Stronger cedi forecast by end 2009

The Ghana cedi is expected to register significant gains and remain strong against the major trading currencies by 2010, whilst the dollar is likely to continue sliding against the major currencies.

This development will leverage the cedi, which has recorded tremendous improvement in its performance since last week as it appreciated by 0.18% against the US Dollar, 0.92% against the British pound, 1.02% against the euro, and 1.01% against the South African rand.

The dollar will lose value against the euro, and see the cedi appreciating at about 130% against the dollar by next year, said Stephen Bailey-Smith, the Head of Emerging Markets Research at the Standard Bank Plc, parent-bank of Stanbic Ghana Limited, in Accra at a forum.

Meanwhile, analyst have projected that the Ghana cedi is likely to settle between the 23.5% - 25% range of depreciation by the close of year 2009.

Last year the cedi lost by 14 percent to the four major trading currencies, the dollar, the pound, euro and the CFA as measured by the GCS-CEDI INDEX.

This was on the backdrop of 25% depreciation to the US dollar, 8% appreciation to the British pound sterling, 21 percent depreciation to the euro and 17% depreciation to the CFA.

The cedi is not likely to experience any major change from its current trend towards the end of the year though day by day fluctuations are unavoidable.


He explained that this year’s performance of the cedi has resulted mainly from the performance of the British pound sterling, which as of Monday stood at a 33% loss. Though the dollar has been fairly stable for the past four months, a year to date depreciation of 18.3% is still on the high side.

Dr. Ernest Addison, Director of Research, Bank of Ghana, has said the volatilities that characterised the foreign exchange market in the first half of the year have given way to some stabilisation which has continued into the fourth quarter.
The seminar was expected to focus on customers’ understanding the direction of the local macro-economy.

The forum brought together managers, directors from corporate treasurers, finance directors, senior managers and customers of Stanbic Bank, to afford them an opportunity to acquaint themselves with the current dynamics of the Ghanaian economy, and the tenets of hedging both interest rates and currency risk in the global marketplace.