Professor Lord Mensah, a financial economist, has weighed in on the performance of Ghana’s local currency, the Cedi, stating that it is now adjusting to its true market value following a period of manipulation last year. According to Professor Mensah, the Bank of Ghana’s efforts to curb the depreciation of the Cedi involved selling over $200 million in the last quarter of 2024. However, he asserts that during the election period, the Cedi was artificially influenced to create a favorable economic impression.
Professor Mensah predicts that the Cedi will likely witness some stability starting in March 2025. He also emphasized the importance of reducing the demand for the dollar, calling on the Mahama-led administration to urgently address dollar demand activities by the government and businesses. This would help stabilize the local currency in the face of ongoing pressures.
Current Exchange Rates and Market Trends
As of January 24, 2025, the Cedi has experienced slight gains against major trading currencies, especially the U.S. dollar. The Central Bank of Ghana reported the Cedi is trading at a buying price of GHC 15.11 and selling at GHC 15.12 to the dollar. The British pound is being bought at GHC 18.62 and sold at GHC 18.64, while the euro is trading at GHC 15.72 for buying and GHC 15.73 for selling.
However, in the retail forex market, the Cedi’s performance varies. Some major forex bureaus are reporting the Cedi at GHC 16.10 to the dollar, GHC 19.60 to the British pound, and GHC 16.60 to the euro. These fluctuations are a reflection of the ongoing adjustments in the currency market as the Cedi finds its true value.
Outlook for the Cedi in 2025
Professor Mensah suggests that the seasonal demand for foreign currency, typical of the first quarter of the year, is contributing to the current volatility in the Cedi. However, he remains optimistic that by March 2025, the currency will experience greater stability as demand pressures ease. The key, according to him, is for both the government and businesses to work on reducing excessive demand for foreign currency, especially the dollar, which continues to impact the Cedi’s value.
In conclusion, while the Cedi is facing short-term volatility, especially with the ongoing seasonal demand, there is hope for a more stable currency outlook in the coming months as the local economy adjusts and the market finds equilibrium.
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