The Ghanaian Cedi exchange rate Essay

The Ghanaian Cedi
The Ghanaian exchange rate is set based on the US dollar system. Presently the USD is worth almost 4 times the Ghana cedis meaning I USD is equivalent to GH$3.75900. This rise in the Ghana cedi has caused appreciations and depreciations that has had social and economic effects in the lives of Ghanaians. For example, when a depreciation (dollar in a low price) of the USD occurs or comes down, definitely prices of products and technology would come down as well and this happens simultaneously in other countries too, stimulating investments, the inflation would be easier to control, causing a reduction in gas prices, and many other benefits that give people more acquisition power and also giving strength for the internal market, creating an economic cycle and profit for different sectors. When this happens the economy stabilizes itself and everything comes to normal. In the 1990s the Ghana cedi was almost the same in terms of conversion to the USD but due to poor management and mishandling of the nation's funds on the part of government the rate rose dramatically.
On the other hand, when an appreciation (dollar in a high price) of the USD occurs, the Ghanaian economy is affected directly, rising prices of imported products, such as cocoa, petroleum, machinery, and enhancing the inflation. However, one of the biggest impact of the USD on an international student, is the purchase of flight tickets and mainly the payment of college tuition. To explain this situation, data from the beginning of the last 8 years was collected to predict the exchange rate for future years. Based on information provided by the Bank of Ghana and the exchange rate.org, the highest value is found now in 2016, where the dollar is GH$3.82332, and the lowest value was in 2008 with the dollar at GH$1. This means, if a student from Ghana, for example myself came to USA in 2008, he graduated in 2012, having an average dollar rate exchange of $1.76 over the four years. However, if I attend in 2012, his expecting graduation would be in 2016. In order to predict the average dollar rate exchange for him, is necessary to determine the dollar value for 2016. Analyzing the shape of the graph, we can assume that it characterizes a quadratic equation "f(x)=a(x-h)^2+k". Let's make x = 0 for 2003 if the trend continues, and considering the highest and the lowest points (0, 3.65) (8, 1.7), we can apply these numbers into the function and predict the dollar rate exchange for 2016 as shown below
We can conclude that the dollar appreciation will affect the money invested and paid by his parents for the costs of living and studying in the USA, because every money being invested has to be multiplied by 2.46 in 2016 with an average of $2.25 USD over the four academic years, while the other student in 2012, had to multiply every GH$$ by 1.81 during his last academic year.
References
http//www.exchange-rates.org/history/GHS/USD/T