Donít Expect 2-1 Cedi-Dollar Rate; Dep. Finance Minister

In spite of remarkable recovery by the local currency in recent weeks, deputy Finance Minister, Mona Quartey, wants businesses to measure their expectation because the gains made by the cedi can only be sustained by reducing the nation’s thirst for imports.

Ultimately, sustaining the cedis’ stability depends on a deliberate plan to minimise the spending of dollars by reducing the alarming quantum of imports into the country.

The cedi has enjoyed a remarkable comeback after losing in excess of 22% of its value against the dollar since January. Last year it depreciated by at least 33%. Before July 2015, the cedi was pegged at GH¢4.4 to the US dollar

But thanks to some 20million dollars weekly injection by the Central Bank, the cedi has recovered and is now trading at GH¢3.4 to the dollar, according to a July 10 update on the BoG website.

The market is showing cautious optimism with businessmen worried the recovery may be a flash in the pan.

Mona Quartey acknowledged the good work of the BoG in stabilising the cedi and realizes that sustainability which her ministry will have to deal with is the real task at hand.

She dismissed the expectation that the cedi–dollar rate could reach 2 cedis to a dollar.

“That will be unreasonable and artificial, “she said. In her personal opinion, the market could peg the rate around 3.5 cedis to a dollar.

For radical or long-term sustenance, Mona Quartey joins in the recommendation made by several economist and analysts.

It will all come down to the Ghanaian addiction to imports and perceived aversion for exports, she explained. These two tendencies will have to change, she observed.

She also explained that government has been working on using gas to generate power instead of having to buy fuel in dollars which also hurts the cedi ultimately.

While government does its part, she said businesses should look to go into exports especially agri-business.