Joe Jackson is the CEO of Dalex Finance
The Chief Executive Officer of Dalex Finance, Joe Jackson, has noted that the current depreciation of the Ghana cedi to sell at GH¢12 is realistic.
According to him, the strong run of the cedi in the first six months of the year was a result of the interventions by the Bank of Ghana.
He noted that after the Central Bank withdrew its interventions, the real value of the currency is being realised.
Cedi depreciates to GH¢12.05 against the US dollar
“Indeed, when you look at what happened, the Central Bank was intervening in the market. So long as the Central Bank was intervening, the rates were around 10, 11. Then the Central Bank announced that it won’t intervene anymore. And as soon as it announced that it won’t intervene, what happened? The rate shot up from 10, 11 to the 12 plus,” he explained.
Jackson opined, however, that the current level of the cedi is a “far more defensible position” for the Central Bank than the earlier GH¢10.5 rate.
The Ghana cedi is currently selling at GH¢12.05 on the interbank market, falling from an earlier rate of GH¢10.50.
The economist noted that the earlier rate was an overvalued rate of the local currency.
“But it is my opinion that the rate of 12 plus is a far more defensible position for the Central Bank than 10.5. And that the 10.5, even though it had a really feel-good factor and everybody became bullish, over time, because of how much the cedi was over-valued, would have brought us challenges,” Jackson added.
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