Cedi Depreciation: Professor Hanke Slams Databank’s Projection That Cedi Will Soon Stabilise

Cedi Depreciation: Professor Hanke Slams Databank’s Projection That Cedi Will Soon Stabilise

  • Economics professor, Steve Hanke, has said a forecast that the cedi will stabilise soon is inaccurate
  • The US-based economist described Databank Research's projection as "wishful thinking"
  • Databank Research had stated that the Cocoa Syndication loan would shore up the struggling currency against the dollar

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US-based economics professor Steve Hanke has rejected Databank Research’s projection that the cedi will stabilise against the dollar and other major currencies in the coming weeks.

The professor of Applied Economics at the John Hopkins University in the United States has tweeted that the projection is not grounded on credible data.

“It is just wishful thinking,” he tweeted on Friday, September 16, 2022.
Prof Hanke
Prof Steve Hanke is a professor of applied economics at the John Hopkins University. Source: UGC.
Source: Twitter

In his estimation, since 2020, the cedi has depreciated by over 41% against the United States dollar.

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Databank Research’s Forecast On The Cedi In Coming Weeks

Databank Research, the research arm of Databank, co-founded by finance minister Ken Ofori-Atta, forecasted that the cedi will hold up against other major trading currencies in the coming weeks.

The forecast was grounded on expected 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 financial and investment firm that has recently been at the centre of conflict of debate.

Although co-founded by the finance minister, the company has been contracted as Transaction Advisor (TA) for many of the government foreign loans.

As TA, Databank gets a commission on every loan the state contracts. Hence with the huge borrowing partly to blame for the cedi depreciation, critics have pointed accusing fingers at the firm, and at the minister for breaching conflict of interest regulations.

Cedi Sells Above GH¢10 To One Dollar At Forex Bureaus After Brief Marginal Appreciation

YEN.com.gh reported in a previous story that a marginal appreciation of the Ghana cedi against the dollar and other major trading currencies was short-lived as it sold above GH¢10 to $1 again.

As of Monday, September 5, 2022, forex bureaus in Accra are selling $1 for GH¢10.12 and buying it at GH¢9.90.

Last week, the cedi brought hope to many traders and Ghanaians in general when it started the last quarter of the year on a high note, appreciating marginally against the dollar at forex bureaus on September 1, 2022.

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Source: YEN.com.gh

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