General News of Friday, 16 September 2022
Source: www.ghanaweb.live
2022-09-16Databank's Cedi stabilization projection 'wishful thinking' - Prof Steve Hanke
Prof. Steve Hanke, renowned international economist at the Johns Hopkins University-USA
A professor of Applied Economics at the Johns Hopkins University in the United States, has dismissed a recent report that the Ghana cedi will soon stabilize against the dollar.
Prof. Steve Hanke, who has taken to commenting on the Ghanaian economy in recent months, cited a Databank Research on the stabilization of the local currency, referring to it as 'wishful
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"Databank Research says the Ghanaian Cedi will stabilize in a few weeks. That's just WISHFUL THINKING. Since Jan 1, 2020, the cedi has depreciated over 41% against the USD.
"Remember my 95% Rule: 95% of what you read in the press is wrong or irrelevant," his tweet which referenced a GhanaWeb publication read.
The Databank Research according to The Ghanaian Times report was projected to stabilize against other international trading currencies "in the coming weeks on the back of inflows from the Cocoa Syndicated loan.
“In the coming weeks, we expect the cedi to find a cushion on the back of expected forex inflows from the $1.3 billion cocoa syndicated loan,” Databank's Weekly Currency Report issued earlier this week stated.
Databank is a leading financial institution that was co-founded by Finance Minister, Ken Ofori-Atta. It is reputed to play a leading role in contracting government loans form the capital markets.
The galloping depreciation of the cedi against the dollar has been topical in recent months along with rising inflation.
But the Databank Research said despite the improved forex reserves, sustained demand for the dollar weighed on the cedi, subduing its rally in the first week of September this year.
The central bank recently "allotted $25 million across the 7-day to 75-day tenors against total bids of US$107.75 million,” Databank Research, said.
SARA
