Courage Martey is an Economist with Databank
• An economist with Databank has predicted a further depreciation of the Ghanaian cedi against the US dollar for the rest of 2021
• He noted factors such as inflation and the high cost of living as the reason
• He hoped that the inflation rate, although hanging in the single-digit this year would go above 8%
The local currency is likely to take a further dip during the last four months of the year 2021, an economist has revealed.
According to Courage Martey, the pressure on the cedi as well as some external factors like inflation will further cause its depreciation.
“Looking at the amount of pressure on the currency already and looking at the size of the external factors for Ghana until the end of the year, we see scope for some more depreciation, albeit modest depreciation before the end of the year. So from where we are it would not be out of place to see the Cedi recording some more depreciation,” Martey told Citi Business News.
He futher added that, “First of all if you look at the fact that by the end of this year we still expect to record a current account deficit in the region of 3%, and we still are looking at an inflation rate although in single digit this year, but above 8 percent. These indicators show that there is scope for the depreciation of the Cedi beyond where we are today”.
The Ghana cedi begun this year [2021] with some stability, trading at GH¢5.76 pesewas per US$1, from January through to June.
But the recent drop of cedi against the US dollar, in the months of July and August, saw a 2 percent drop in its value thus trading at GH¢6. This is a result of increasing import charges, high cost of living, fuel price increment among others.