Governor of the Financial institution of Ghana has downplayed projections from London primarily based Economists Intelligence Unit (EIU) that the Ghana cedi could witness an additional round of critical depreciation in the coming months.
Dr. Ernest Addison reported, “I don’t believe that these projections are plausible particularly to be equipped to undertaking the exchange rate for three decades that is genuinely a daring thing to do and you will come across that these kinds of projections far more typically than not do not turn out to be proper since the horizon is far too significantly out.
He included, “But I can tell you that our aim is to maintain the cedi as secure we can and also continue to keep our inflation on goal. We should really count on that the cedi would keep on being secure in excess of the short to medium term on the foundation of that simple fact that we are at the moment rather properly positioned in phrases of the degree of global reserves we have.”
The Governor was speaking at the Financial Policy Committee’s Conference push meeting which announced the central bank’s final decision to hold the policy level at 16 for every cent.
The Economist Intelligence Unit (EIU) has predicted that the Ghana Cedi will strike GH¢6.50 to US$1 by 2023.
This was contained in EIU’s state report on Ghana which was introduced on 13 Could 2019.
In his briefing notes, the editor of the EIU report, Nathan Hayes, said that: “The cedi will stay susceptible to periods of volatility, presented the ongoing domestic economic weak spot of high dependence on commodity price ranges. From an common of GH¢4.58: US$1 in 2018, the forex will weaken to GH¢6.50: $1 in 2023”.
The EIU mentioned it now expects the cedi to normal GH¢5.31 to $1 in 2019, from GH¢5.20 to US$1 formerly, with depreciation pushed by the government’s fiscal situation, jointly with the substantial recent account deficit and improved political uncertainty right before the 2020 elections.
“We have revised down our inflation forecast for 2019, to 9.6% from 10.9% formerly, as the broader downward craze in inflation from its 2016 highs continues and as the higher foundation results from 2018 mood the expansion level more than we previously envisaged,” the report additional.