Cedi will be fairly stable in 2021 – BoG

The Bank of Ghana has given the firm assurance that the Ghana cedi will be fairly stable in 2021.

This follows projections from the Economic and Finance Think Tank, Center for Economics Finance and Inequality Studies (CEFIS) that the cedi will end the year at GH¢6.45.

According to the Center, the local currency will also hit GH¢6.24 pesewas by June 2021.

In its projection, it said the Ghana cedi will face some challenges this year.

BOG’s response

But the Bank of Ghana’s tells THE MEDIA it doesn’t “see” the cedi experiencing or going through any serious challenges that will affect its stability.

According to the Central Bank, it has already put lot of measures in place that will help stabilize the Ghanaian local currency in 2021.

The regulator maintains that together with its strong reserve position, forward sale of dollars and other “market monetary” measures, will put the local currency on strong footing for this year.

The source close to the Central Bank maintains that having a strong reserve position will provide liquidity for market demand, adding the Foreign Exchange Forward Auction programme has helped to actually “manage” dollar demand for 2020 and it will still be effective in 2021.

The source also adds that based on the Central Bank owns internal forecast, the cedi may even end up performing far better than in 2020.

“You remember last year there were similar projections about the cedi, however it rather ended up registering one of its best performances in recent times”, another source close to the Bank of Ghana added.

The Bank of Ghana is however silent on its own end -year projection, but insists that the cedi will indeed perform well, assuring businesses of a fairly stable local currency.

Government fiscal concerns raised

The Center for Economics Finance and Inequality Studies Cedi Outlook Report, primarily put the blame or challenge on the fiscal side to government.

But government in a response maintained it does not see this happening in 2021.  This is because it is now in a better position to manage the fiscal situation, coming on the back of finalizing a significant part of the COVID-19 related expenditure for last year and haven’t ended the Presidential/ Parliamentary elections on a good note.

Source: Goldstreet Business

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