Cedi Records Best Ever Performance

Statesman -- With barely seven weeks to the end of the year, financial experts have already started expressing their satisfaction with the performance of the cedi, expecting it to record its best ever performance against the dollar since the 1980s liberalisation.

At the present annualized 2.54% depreciation against the US dollar, it has been considered to be at its best in recent times.

Today, the monetary policy committee of the Bank of Ghana will announce its review of the economy amid speculations that the prime rate will be further reduced from 18.5%.

Mr Philip Buabeng, Director of Studies at the National Banking College and Mr Felix Nyarko-Pong, Executive Director of Barclays Bank Ghana Limited agreed that the cedi has performed creditably well within the year under review.

They both agreed that such an achievement was possible because of the favourable conditions of other fundamental variables in the economy such as the fundamentals of inflation, interest rates, balance of payment, investors' confidence in the economy, among others.

According to the Bank of Ghana data, in April this year, the Gross International Reserves of Ghana stood at $1.42 billion which represented an increase of 125.5% from that of the same period in 2003. This meant a cover of 41/2 months of import of goods and services which has today exceeded that cover.

The Ghana Investment Promotion Centre, in the second quarter of this year, as a fall-out from the prevailing good economic environment, registered a total of 47 foreign direct investment projects worth a capital outlay of $24.39 million.

This compares favourably with the 38 projects estimated at $22.15 million registered in the second quarter of 2003.

Economic analysts assert that the Government would not have been able to absorb the shock of the price of petroleum increase if its revenue position was not healthy, nor would the Bank of Ghana have been able to meet both domestic and foreign demand for both the cedi and foreign currencies.