Economist and Senior Lecturer at the University of Ghana Business School, Professor Patrick Asuming, has identified rising confidence in the Ghanaian economy as a key factor behind the recent appreciation of the cedi against the US dollar.
Speaking in an interview on current economic trends on Channel One TV’s The Big Issue, Prof Asuming acknowledged that while the cedi’s current strength may not be sustained throughout the year, recent developments have bolstered public and investor confidence, contributing to the currency’s improved performance.
“I don’t think that we will end the year with the cedi trading at what it is currently trading against the US dollar,” he cautioned. “I don’t expect for a moment that that is where we are going to be.”
However, he noted that the cedi’s recent gains are not accidental. “Since the last election, confidence within the Ghanaian economy has strengthened, and it strengthened when the budget was read and when the IMF came to the staff level agreement with the GoG.”
Prof. Asuming pointed to data from the Bank of Ghana’s summary of economic and financial indicators, which show significant improvements in sentiment.
“Between the end of last year and February alone, the consumer confidence index jumped by about 10%. The business confidence survey also recorded a similar rise,” he said.
While other technical and fiscal factors have also supported the cedi’s appreciation, the economist stressed that renewed optimism among consumers and businesses has played a meaningful role.
“If you look at BoG’s summary of economic and financial data you see between the end of last year and February alone, consumer confidence index has jumped about 10% up and the business confidence survey has also jumped up.
“So in addition to all the factors that has been mentioned there is also been in some confidence in the economy that has somehow contributed to the cedi,” Prof Asuming said.
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