The local currency for the first half of 2021 recorded a marginal depreciation of 0.04 percentage points to the American dollar.
The depreciation of the cedi was triggered by an uptick in demand for the greenbuck by multinationals and large corporates in the second quarter of 2021 which overturned the impressive appreciation recorded by the cedi against the dollar for the first quarter of this year.
The depreciation would have been much worse had it not been for the Bank of Ghana’s policy interventions, particularly the Forex Forward Auction and the staggered payment of dividends by foreign banks to their shareholders.
After the impressive performance we saw from the Ghana cedi in the first quarter of this year with a gain of about 0.55% against the dollar, the cedi could not hold onto that gain in the second quarter because we saw an uptick in demand particularly from corporate and multinational within the second quarter of the year.”
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“And this demand pressure was further worsened by limited supply of forex on the market despite the Central Bank’s intervention on the forward forex market; because of this demand pressure, in the second quarter of this year, the depreciation we recorded overturned the appreciation we enjoyed in the first quarter of this year,” stated Senior Economic Analyst at Databank Research, Courage Martey.
The cedi’s half-year performance is similar to last year and one of the best in recent time. The cedi ended the first quarter of this year as the best performing currency in Africa.
This follows the about 0.56 percent appreciation against the dollar, similar to its 2020 performance.
