Ghana cedi depreciates vs dollar after brief gain

Tue May 15, 2012 6:56am GMT

ACCRA (Reuters) - The Ghana cedi currency fell against the dollar on Monday on strong demand for the greenback by importers, a trader said on Monday.

The dollar-cedi rate closed at 1.8960/85 after opening at 1.8840/65 on strong local corporate demand, Jacob Brobbey of Barclays Bank Ghana told Reuters.

The local currency has so far depreciated about 14 percent since the beginning of the year, hitting fresh lows against the greenback mainly on the back of a surge in import by local firms to fuel Ghana's growing economy.

The Bank of Ghana responded to the cedi's slide, which also pushed up inflation, by hiking its policy rate by one percentage point to 14.5 percent in April.

It also reintroduced short-term bills, changed bank reserve requirements and introduced other measures to help stabilise the cedi.

The central bank is also planning to issue a 3-year bond at the end of May. Following these moves, the cedi showed signs of a rebound last week, gaining slightly on Friday.

Brobbey said the central bank sold dollars briefly to the interbank market on Monday, "but it appears it did not meet the demand."

A man holds Ghana's cedi notes in a file photo. REUTERS/Luc Gnago
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