Bloomberg News

Ghana’s Cedi to Gain to March Peak as Central Bank Holds Rate

September 01, 2011

Sept. 1 (Bloomberg) -- Ghana’s cedi may strengthen the most since March by the end of this month after the central bank decided to hold its key lending rate today, according to Standard Bank Group Ltd.

The currency of the world’s second-biggest cocoa producer will gain as much as 0.3 percent, according to Chris Nettey, a currency trader at the local unit of the lender. According to data compiled by Bloomberg, the cedi would appreciate to 1.5233 per dollar, from a close of 1.5279 on Aug. 30. The currency was last at that rate on March 14, when it closed at 1.5235, according to the data.

The Bank of Ghana maintained the policy rate at 12.5 percent, Governor Kwesi Amissah-Arthur told reporters, citing rising inflationary pressures following an increase in utility prices this week.

“Investors will see the rate decision as an opportunity for better yields,” Nettey said by phone. “It shows that the Bank of Ghana wants to keep inflation in the coming months under control, and hence any depreciation in the currency due to inflation.”

Ghana’s three-month borrowing costs are 9.26 percent, the lowest since Nov. 9, 2007, when Bloomberg began tracking yield. The cedi traded at 1.5282 per dollar by 4:12 p.m. local time.

--Editors: Emily Bowers, 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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