ANALYSIS: Cedi’s good run may be ending

cediThe recent sharp appreciation of the Ghana cedi against the dollar appears to be ending.  Over the past four days the local currency has seen some marginal depreciation.

Compared to previous weeks which saw the value of the Ghana cedi go up by at least one pesewa on daily basis, the trend seems to have changed in the last four days.

The Ghana cedi has depreciated marginally by about 0.04 percent, compared to the almost 8 percent jump in value recorded every week over the past 23 days.

According to the Bank of Ghana, the cedi was this morning trading at 3 Ghana cedis 28 pesewas. However  when you walk into any forex bureau or a commercial bank you are likely to  get it between 3 Ghana cedis 50 pesewas and 3 Ghana cedis 60 pesewas.

For some analysts, the current development might lend credence to the fact that, the rate being quoted for the cedi might be in line with government’s own projections to let the local currency hover around the 3 Ghana cedi band.

So what’s causing this?

Could it be that the Bank of Ghana is no more in a position to pump more dollars into the market, or could it be the work of currency speculators?