Finance Minister, Ken Ofori-Atta
Parliament has rejected 2022 budget and economic policy
Cedi still remains under pressure
Appetite for government securities uncertain
Courage Martey, a Senior Economic Analyst at Databank Research has pointed that investors are yet to show significant appetite for government securities following the presentation of the 2022 Budget.
According to him, analysis from his outfit reveals investor sentiment show foreign investors want a much faster pace of fiscal consolidation.
In an interaction with Joy Business, Courage Martey said, “In fact, our gauge of foreign investor sentiment around the budget shows that a lot of foreign investors feel like that a faster pace of fiscal consolidation is necessary”
“However, they feel the revenue expectations are ambitious and for that matter, they are very cautious on the outlook for the FX [foreign exchange] exposure they will take if they come into the local market now,” he continued.
Touching on the supply side for FX, Martey explained, “so generally, the supply side is also subdued by the perceived risk to the outlook and there is also elevated demand from corporate investors.”
On the local currency front, the Databank Economist said the cedi still remains under pressure and is likely to continue on the same trajectory till the end of 2021.
“But we believe that the Central Bank’s regular interventions on the spot and forward market will be sufficient to prevent volatility. So that the depreciation pressures will continue to remain moderate till the end of the year” he added.
Meanwhile, Parliament on November 26, 2021 rejected the 2022 budget and economic policy of government following a voice vote.