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Cedi Makes Gains   
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The daily depreciation of theGhanacedi against major international currencies is over as it continues to make some gains in the last two months.

Until then, the local currency had depreciated by some 20 percent to the dollar since the beginning of the year.

But Dr Henry Kofi Wampah, Acting Governor of the Bank of Ghana, told journalists last week in Accra that the local currency was making gains in the last quarter.

Addressing the media shortly after the 53rd Monetary Policy Committee Meeting which deliberated on the latest economic conditions and risks to the nation’s growth outlook, he attributed the marginal appreciation of the cedi against the US Dollar to the Central “Bank’s policy measures which continues to impact positively on the foreign exchange market.”

The Acting Governor explained that the Ghana Cedi had from January to October 2012 recorded a cumulative depreciation of 17.5 percent against the US dollar compared with 3.9 percent recorded in the same period the previous year.

On monthly basis, however, Dr Wampah stated that the local currency appreciated in September by 0.1 percent against the US dollar and again soared by 0.5 percent in October.

Monitors of the interbank and forex markets have noticed the rate at which the cedi has been appreciating.

As a result of the improvements in the value against the dollar, it is now possible to get a dollar from any of the universal banks with GH˘1.40 instead of over GH˘2 two months ago.

Nevertheless, the government has projected that the cedi would depreciate by 11 percent at the end of 2012 in response to pressures on the currency especially during the election period.

The Monetary Policy Committee on Tuesday noted exchange rate pressures, which threatened macroeconomic stability and heightened inflationary pressures during the first half of the year, have eased largely as a result of policy measures implemented.

“In the past two years, we have observed some marginal appreciation of the cedi relative to the US dollar. The reduced volatility in the foreign exchange market has helped to lower inflation expectations in the near term,” said Dr Wampah, who is Chairman of the Monetary Policy Committee.

The committee said it would continue to monitor the economic and financial developments and respond appropriately to preserve macroeconomic stability.

The committee for the third consecutive time this year maintained the prime rate at 15 percent. Since June, the committee has not changed the prime rate which is the benchmark indicator that the Central Bank lends to universal banks.

The decision, the committee explained, was based on the fact that the risks to inflation and growth rate of the country were balanced.
Source: Daily Guide

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