Cedi will fall to GHC8 a dollar in the next 5 months – Pratt predicts

General News of Monday, March 25, 2019

Source: asempanews.com

2019-03-25

Editor of Insight, Kwesi Pratt Jnr. predicted that the cedi would begin to depreciate again to reach 8 ¢ per dollar in the next 4 to 5 months, despite the 800 million euro bond injected into the economy.

He explained that in the last 36 years, whenever the cedi was depreciated, successive governments had used the same borrowing method to strengthen the local currency, resulting in the stability of the cedi for a brief period, mainly five months; then he begins to depreciate again.

For example, the $ 800 million euro bond recently negotiated by Finance Minister Ken Ofori-Atta is "not something new".

Kwesi Pratt, who was part of the "Alhaji and Alhaji" program of Radio Gold, was firmly convinced that the measures implemented by the Akufo-Addo government to solve the problem of the depreciation of the cedi were aesthetic.

"I will not be surprised even in the space of 2 to 3 weeks, the cedi stabilizes around 4.8 or 4.9 to 5 to one dollar; this will certainly happen in the next 3 to 4 weeks. But beware, in 4 to 5 months, the cedi will start ferociously to depreciate and when we wake up, he will soon go to Gh ¢ 8 for a dollar, "he warned.

He reiterated that the government would definitely repay the loan that had served to stabilize the cedi with interest, and that the situation of the economy would be worse.

"Your cedi is not doing well, all you do is borrow and invest in the economy to get the appearance of stability. Will not you pay the money you borrowed? When you start withdrawing $ 800 million from your economy to pay for the money you use to stabilize the cedi, what will happen to the cedi again? He asked.

As a result, he said, "If we are to celebrate the stabilization of the Cedi by injecting currency into the economy, we should have started our parties 36 years ago. I remember that at the time of the late Professor Mills, when Mr. Duffuor was the Minister of Finance, the same method was used and no one had organized a party. "

"… While we stupidly announce to speculators on currencies that we are going to inject $ 800 million into the economy to stabilize the cedi. . . they fly on us like flies and within a maximum period of 4 months, currency speculators will scoop the 800 million dollars from the Ghanaian economy, because they constantly monitor where it is cheaper to buy foreign currencies for maximize their profits. . . all these Mallams and Alhajis who are the sheikhs of currency speculation will become fabulously rich and the cedi will begin to depreciate again, "he added.

He therefore described as "total loss of time and resources" the injection of $ 800 million of bond capital into the economy by the Minister of Finance in order to stabilize the cedi; pointing out that such a measure will not work.

Last week, the government raised $ 3 billion from international financial institutions through a three-tranche Eurobond that drew more proposals than the country had requested. .

At the close of a tour in London, the appetite for the sovereign loan of 2019 had grown, which had resulted in orders totaling $ 21 billion, or about seven times more than the amount needed.

The government delegation, led by Finance Minister Ken Ofori-Atta, however, agreed to only $ 3 billion, according to the budgeted amount approved in the 2019 budget and the government's economic policy.