Cedi stabilises marginally over 3-year bond issue, 2017 budget

Cedi stabilises marginally over 3-year bond issue, 2017 budget
Source: Ghana | Myjoyonline.com | Abubakar Ibrahim | Joy Business
Date: 17-03-2017 Time: 03:03:25:pm

Government’s decision to issue a three-year bond last week has helped stabilize the cedi marginally on the interbank market.  

The local currency which has been depreciating sharply since last month has made some marginal gains over the past five working days.  

The cedi which was trading at around, GHC4.80 around early March is now trading at around GHC4.60 pesewas.

Market analysts attribute the marginal stability to a decision by some offshore investors to bring in some dollars to buy some cedis in preparation for the three-year bond auction.

The auction which closes on March 9 saw government raise a little over GHC1 billion and would pay a yield of 21.5 percent.

Others are also attributing the cedis' stability to investor response to policies outlined in the 2017 budget, a view that was expressed by deputy Finance Minister-designate, Kweku Kwarteng.

He told JOYBUSINESS in an interview that the policies in the budget have shown investors are convinced about government programs aimed at stabilising the cedi. 

 Economist Dr. Joe Abbey has also argued that the policy measures in the budget could help stabilise the cedi.

Some have argued that more measures are needed to sustain this trend so the local currency can firmly stabilise against the dollar and major international currencies as projected by the Bank of Ghana (BoG) and the Senior Minister Yaw Osafo-Maafo.  

The trend if sustained could reduce cost of living in the coming days.  

According to Joseph Biggles Amponsah who spoke to the Reuters said, “the cedis' (rallying) momentum appears not to be waning anytime soon and we could see it recover its losses further against the dollar in the face of improved forex liquidity and a somewhat dwindling demand”

 

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