Cedi to Appreciate Against the Dollar By 130%

The cedi is expected to make significant gains and remain stronger against the major trading currencies by 2010, says Stephen Bailey-Smith, Standard Bank Plc -Research, Head of Emerging Markets. According to him, the dollar was more likely to continue is slide against the major currencies, and this would give leverage to the cedi, which has in recent times picked up on the interbank market. In his view, the dollar would lose value against the euro, and thus sees the cedi appreciating at about 130% against the dollar by next year. Stephen Bailey-Smith made these predictions when he spoke to The Chronicle at a day's seminar, organised by Stanbic Bank Global Markets, on the theme "Currency and Interest Rate Dynamics - Practitioners' Perspectives." A recent analysis by Gold Coast Security also reinforces Stephen Bailey-Smith's assertion, by indicating that the cedi was not likely to experience any major change from its current trend towards the end of the year, though fluctuations were unavoidable. They said this was based on the assumption that prevailing international conditions would continue. According to the report, with gold hitting record highs on a daily basis, cocoa averaging a monthly appreciation of 3.08 per cent, crude oil remaining below $80 per barrel, and the prices of goods and services on a downward trend, the performance of the local currency seemed to largely rest on the performance of its counterparts on the global front. The Ghana Cedi recorded tremendous improvement in its performance for last week, as it appreciated by 0.18% against the US Dollar, 0.92% against the British Pound, 1.02% against the Euro, and 1.01% against the South African Rand. The seminar was expected to focus on customers understanding of the direction of the local macro economy. The programme was also to afford corporate treasurers, finance directors and senior managers and customers of Stanbic Bank, the opportunity to learn more about the current dynamics of the Ghanaian economy, and the tenets of hedging both interest rates and currency risk at a day's seminar in Accra.