Cedi appreciation won’t last – James Avedzi

Chairman of Parliament’s Finance Committee, James Avedzi, has said the rapid appreciation of the local currency, the Cedi, against major trading currencies will not last.

According to him, the Central Bank cannot continue to pump in dollars to tame the depreciation as it has done in the last few days.

In the past two weeks, the local currency has significantly appreciated against its three main international trading currencies: The Euro, the US Dollars and the British Pound Sterling. As at the last check, the cedi now sells for GHC 3.3 to US $1 from over GHC 4.3 to the dollar.

Also, the Cedi has gained significant strength against the Euro which was previously selling for GHC4.8 to an Euro. Similar trend has been recorded in both the forex and interbank rates for the British Pounds.

This recent growth of the Cedi is said to be one of the fastest in the history of the Ghanaian economy. Foreign Exchange speculators have projected that at this rate, the cedi could climb in value to as much as GHC 2.382 to one US dollar by the close of July 2015 and further strengthen to GHC 1.952 to one US dollar by the end of 2015.

But speaking to Accra-based Okay FM Tuesday, Avedzi said the rise of the local currency cannot be sustained.

“The Bank of Ghana can’t continue to be pumping in the $20 million they are pushing into the system every week.

“We don’t have much money to sustain it. What the country needs to do is to improve commodity exports in order to attract some foreign exchange, that is the only way to sustain the rise of the Cedi,” he stated.

He, nonetheless, believes the interim measure will push individuals who are hoarding foreign currencies in anticipation of a fall of the Cedi to go and change them.