Some bank treasuries are anticipating a relative stability of the cedi in the short to medium term following the Bank of Ghana’s auctioning of dollars to commercial banks.
According to them, the depreciation may either drop slightly or remain stable in relation to other major currencies.
On Thursday, the cedi depreciated slightly and hit the 4 cedis mark.
As at Thursday morning, it was trading at 4 cedis 1 pesewa on the interbank market.
“From the morning the interbank average rate has inched up to 4.03 but this is the first auction and we expect that in two weeks time, when the Central Bank comes into the market again, it is likely that with supply on the market increasing, either the rate will come down slightly or stabilize,” the General Manager for Treasury at HFC Bank, Joseph Nketia told Citi Business News.
The Central Bank, on Wednesday (30th November), issued the first of three 20 million dollars auctions scheduled between November and December this year.
The total auction amount of 60 million dollars, is part of proceeds from the 1.8 billion dollars cocoa syndicated loan.
Citi Business News understands banks with prices ranging between 3 cedis 99 pesewas and 4 cedis 3 pesewas were largely successful.
Joseph Nketia further explained that the price accepted by the BOG demonstrates its commitment to keep the rate at marginal levels.
“It is an indication that the central bank is not expecting the rate to go rather high; ideally in most auctions, the highest bidder is considered before others.”
Meanwhile as at Friday, 2nd December 2016, the cedi has gained 3 pesewas and it is selling at 4 cedis 4 pesewas.
On the interbank foreign exchange market, the dollar gained as much as 18 pesewas to trade at 4 cedis 36 pesewas.
By: Pius Amihere Eduku/citibusinessnews.com/Ghana