The Ghanaian Cedi, cumulatively, has depreciated by 2.9 per cent against the US dollar for this year.
The depreciation of the cedi for this year, according to the Governor of the Central Bank, Dr Ernest Addison, has performed favourably against the US dollar when compared to last year when the cedi depreciated by 9.3 per cent for the same period.
Speaking at the Central Bank’s 96th Monetary Policy Committee (MPC) press briefing, the Governor attributed the performance of the cedi to a strong foreign exchange reserve position, which he says provided and anchor for exchange rate stability.
“The strong performance of the cedi, broadly reflects improvements in global financial market risk sentiments, foreign inflows from mining, strong remittances, and forward sales of foreign exchange by the Bank of Ghana,” he noted.
Meanwhile the Central Bank has decided to maintain the monetary policy rate of 14.5 per cent after it reduced the policy rate by 150 basis points in the wake of the coronavirus pandemic.
Cedi expected to depreciate by 5% by end-2020
Despite the ‘sterling’ performance of the cedi against the dollar, the cedi is expected to cumulatively depreciate by 5 per cent by end-2020.
The local currency has since January 1, 2020 lost 24 pesewas to the dollar, approximately 2.60 per cent in value to the US dollar.
Several analysts just like the Governor, have attributed the strong performance of the cedi, to the Bank of Ghana’s foreign forward auctions and spot market interventions, supported by healthy secondary reserves. With others also noting that the Covid-19 pandemic and political uncertainty in the US has benefited the cedi.
Historical performance of the Cedi against the dollar since 2015
2019 12.9% depreciation
2018 8.4% depreciation
2017 4.9% depreciation
2016 9.6% depreciation
2015 18.75% depreciation
