Bloomberg News

Ghana Cedi Set to Gain to February Peak on Oil, Databank Says

July 08, 2011

July 8 (Bloomberg) -- Ghana’s cedi is set to appreciate to its strongest level since February by the end of the third quarter as the West African nation increases oil exports, raising dollar receipts, Databank Financial Services Ltd. said.

The cedi will gain to 1.4900 per dollar, Sampson Akligoh, economist at Accra-based Databank said in a telephone interview today. that would be the strongest intraday level since Feb. 11, according to data compiled by Bloomberg. The currency weakened for the first day in five, slipping less than 0.1 percent to 1.5150 per dollar by 2:39 p.m. in the capital, Accra.

Oil exports from Ghana, which began production in December, amounted to $954.6 million from the sale of 8.6 million barrels of crude from the Jubilee field in the first five months of the year, boosting export earnings by 63 percent to $5.2 billion from a year earlier, central bank Governor Kwesi Amissah-Arthur said July 6.

“We are expecting oil production from the Jubilee field to ramp up to a peak level of 120,000 barrels per day by August, latest by September,” Akligoh said. “With that, we see increased government oil revenue providing a good buffer for the cedi.”

Daily oil output at Africa’s biggest oil find in a decade has been boosted to 80,000 barrels per day since the start of July from 70,000 barrels, Gayheart Mensah, spokesman for the local unit of Tullow Oil Plc, the field’s operator, said yesterday. Output will increase to the peak level by next month or September, he said.

Low business confidence will also stem any cedi depreciation as a decrease in imports cuts demand for dollars, Kevin Adarkwa, a currency trader at the local unit of Standard Chartered Bank Plc, said by phone from Accra today.

The overall business confidence index dropped to 104.1 in June from 106.6 in April, Amissah-Arthur said July 6.

--Editors: Ana Monteiro, Antony Sguazzin

To contact reporter on this story: Moses Mozart Dzawu in Accra at mdzawu@bloomberg.net.

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net.


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