Demand for cedi is expected to rise, which could lead to the cedi tumbling against the dollar, an economic analyst at Databank, Courage Kingsley Martey has said.
He attributed the relative stability of the cedi in the last quarter of 2015 to "some inflows that accrued from foreign debt instruments" in an interview with Accra based Starr FM.
He said, “The cedi experienced stability in the last quarter of 2015 mainly because of some inflows accrued from foreign debt instruments."
“Due to this, the cedi maintained its stability in January. As we enter February, sustainability of the exchange rate stability would be tested by the re-emergence of the seasonal pressures and elevated external risks," he added.
Martey said businesses will be looking at restocking goods sold during the festive season "leading to an increased demand for foreign currencies.” This he said will lead to the fall of the cedi.
According to him, the free fall of the cedi last year was a global phenomenon, adding countries such as South Africa, Angola and others had similar challenges.
He said, "Fortunately, prices of cocoa and gold are stable and we do not expect the depreciation to continue."
To consolidate the gains made, he said what needs to be done now is to manage traditional shocks,in reference to the stability in commodity prices and the impact on revenues.
"In that regard, we can see that the currency has seen its levels. What we now need to manage is the traditional shocks."