Economist Dr. Ebo Turkson has predicted that disbursement of funds from the European Union will help stabilize the cedi.
[contextly_sidebar id=”nOQ68mTvGrwIqLd2gETjCYVwzFfepjZK”]According to Dr. Ebo Turkson the disbursement of 161.38 million euros from the European Union (EU) to support Ghana’s 2015 budget is one way to temporary stabilize the depreciating cedi.
Ghana’s budget execution is said to have delayed as major sources of funding have been held on by foreign donors due to a number of concerns including the country’s high debt level.
Speaking to Citi Business News economist and senior lecturer at the University of Ghana Dr. Ebo Turkson called on the central bank to use the funds to shove the cedi from further decline.
“The good news is that they have now released the funding and that is going to support the budget, government is going to be a little bit free to spend probably more than projected. But let’s hope that the money would be put to good use and once there is hard currency coming the central bank can use that to try to arrest the fall in the cedi to some extent.”
Dr. Ebo Turkson was quick to add that the money being used to shore up the cedi from further depreciation would be temporary because they are only short time measures which might not arrest the cedi permanently.
The cedi continues its losing streak despite moves by the Bank of Ghana and the finance ministry to save it from further fall.
According to the Bank of Ghana from January to May 8, 2015, the cedi cumulatively depreciated by 17.2 percent against the USD, compared with 21.3 percent recorded in the same period in 2014.
Citi Business News checks reveal in January 2015 at forex bureaus the cedi depreciated against the dollar by over 5 percent, in February by close to 3 percent, in March by close to 10 percent and between 1 and 2 percent for April and May this year.
Today 16th of June, 2015, the dollar is being sold at 4 cedis 41 pesewas across forex bureaus after hitting four cedis during the latter part of May, 2015.
By: Norvan Acquah – Hayford/citifmonline.com/Ghana