Cedi declines against dollar; sells at 3.70 pesewas

The Ghana Cedis could soon hit Ȼ4 against the US dollar if more is not done by managers of the economy to halt its decline.

Importers will now require È»3.70 pesewas to purchase a dollar form a forex bureau. But the currency is trading at È»3.60 pesewas.

The cedi has depreciated over the years primarily because of the demand for foreign currencies by individuals, institutions and government.

The foreign-currency denominated transactions has been far greater than what has been generated through economic activity, foreign remittances, grants and loans.

The situation has further worsened due to the actions of currency speculators who have sought to profit from the recurring macroeconomic misalignments, as well as market participants and ordinary individuals hedging against inflation.

Last year alone the cedi depreciated against the US dollar by about 40 percent.

In the short term, the Central Bank can improve upon supply of the dollar in the market to reduce demand, thereby increasing the price; this is according to currency analyst Derrick Mensah.

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