Stabilization of currency
Despite the coronavirus outbreak hitting the global economy really hard and raising fears of global economic meltdown, currencies across Africa are making gains against major international currencies like the dollar.
For instance, the Ghana cedi after losing about 13 percent of its value to the US dollar in 2019, started this year on a buoyant note – registering impressive performances against the US currency and other major world currencies – a position it has since sustained.
The cedi appreciated by 4.75 percent to the US dollar, 6.73 percent to the British pound and 8.26 percent to the euro, on February 27, according to IGS Financial Services Limited, an investment advisory, and a pension fund manager.
Dr. Lord Mensah, an economist with the University of Ghana Business School said the stability of the cedi could be credited to the deadly coronavirus as trading between Ghana and China slumped amid the outbreak.
“Obviously I won’t rule that out, we are not in a standalone economy. For Ghana, a chunk of our trade is with China and because of the virus, people may not be changing dollars.
“I won’t be surprised that it (coronavirus) could have that positive impact on our currency. Even though it is China, most of the transactions we do with them is in dollars and even the Chinese prefer it that way. I won’t be surprised to attribute that to it but we will need a scientific reason to prove that,” Dr. Mensah said on Accra-based Starr FM.
Also, the South African Rand ZAR=D3 had seen some appreciation against the dollar It was up 0.56% at 16.6000 per dollar after having weakened 2.5% last Monday.
