An Economist Dr. Ebo Turckson has predicted the cedi’s current stability may come under threat if the US Federal Reserve (FED) raises its rates.
[contextly_sidebar id=”sCehyeCEdOMbCib7OPiZM1vCqqjAeSuq”]According to Dr. Ebo Turckson the hike will create some artificial shortage as demand for the dollar will be on the high side.
Despite expectations that the FED will increase its rates last month it held it, in part, due to fears that it will have a negative impact on global economic growth.
But chairman of the reserve Janet Yellen has hinted the reserve may increase the rates by the end of the year.
In an interview with Citi Business News Economist and Senior Lecturer at the University of Ghana Dr. Ebo Turckson insisted the inflow of foreign currency especially the dollar into the country will be greatly affected should the US FED increase their rates.
“In all of these things it will affect the inflows of foreign currency especially the dollar and therefore it means that given the demand of the dollar for the economy our cedi is expected to depreciate even further. It could be even possible that we have some investors in Ghana who have and are already deciding to take away their investments to the US because the US are paying higher interest rates or even investors in the US who wanted to invest in Ghana can decide not to do so because they will decide that the US is the saver place to invest.”
He called on government to put in place the right measures to minimize the likely impact on the Ghanaian economy.
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By: Norvan Acquah – Hayford/citifmonline.com/Ghana