Economics lecturer at the University of Ghana, Dr Priscilla Twumasi Baffour, has stated the reasons behind the stabilisation of the Ghana cedi against the dollar in recent days.
This, according to Dr Baffour, is due to the less demand of the dollar by importers during the festive season.
Speaking on Joy News AM Show, she noted the cedi is performing best because of the influx of tourists and other visitors in the country but warned of likely insignificant recurrence should the demand for the dollar increase early next year.
“I believe that there were a lot of speculations that led to the significant increase in the demand for dollar at the time the dollar rose up that sharply. But that said based on the fact that the country is now engaged and has made an advancement and engagement with the IMF,” she said.
“Although speculative activities are coming down and rightfully so a lot of importers have already placed their orders so there’s not much demand and people are also coming home for the festive season and they are also bringing in a lot of forex. So all these culminate into the seemingly strong performance of the cedi against the dollar.”
“Yes, we do not have control over the dollar and so as long as at any point in time demand exceeds supply then it means that the price of the dollar will go up.”
Dr Baffour added that the cedi appreciation can be sustained when the economic fundamentals are moved in the right direction.
“To a large extent it will be sustained when we find that the economic fundamentals are moving in the right direction. Until we have a bit of certainty within this environment, we would say that any gains that we are seeing in the short medium term.”
The Ghana cedi in the past week has continued its rally against the foreign currencies especially the US dollar.
As of today, December 14, the cedi has gained 5.6% value against the US dollar, currently selling between GH¢10.70 to GH¢11.28 in some forex bureaus and commercial banks.
This put the cedi as the strongest performing currency against the American ‘greenback’ in December 2022.