Cedi records 25.8% year-to-date depreciation rate against dollar
In a recent disclosure by the Bank of Ghana, the Ghana cedi has experienced a notable depreciation of 25.8% against the US dollar as of November 2023. The November 2023 Summary of Economic and Financial Data points to a period of relative stability between March and September 2023, with a gradual loss of ground recorded in October and November.
The rate of depreciation, which stood at 22.1% in March and 22.9% in September, accelerated to 25.4% in October and reached 25.8% in November. Presently trading at approximately 12.15 in the forex market, the cedi’s recent performance underscores the challenges facing the currency.
Against the pound and the euro, the cedi has experienced losses of 28.6% and 27.7%, respectively, adding to the complex economic landscape for the West African nation.
The currency’s recent struggles can be attributed to heightened demand for the US dollar from corporates and importers in anticipation of the upcoming festive season. Despite efforts by the Bank of Ghana, including the auctioning of $20 million to Bulk Oil Distribution Companies (BDCs) and providing $2 million on the spot market, these interventions proved insufficient to staunch the cedi’s weakening trend.
On the retail market, the cedi exhibited a 0.41% week-on-week depreciation against the dollar, a similar decline against the pound, and a 0.78% decrease against the euro. Although these figures indicate a moderation compared to the preceding week, the currency remains under pressure.
Looking ahead, there is cautious optimism for stability in the coming week. The recent approval of the $800 million cocoa syndication loan by Parliament and the infusion of a $102.6 million budget support program from the African Development Bank are anticipated to provide a reprieve for the cedi, signaling potential relief from the recent turbulence in the currency markets.
