Cedi’s year-to-date depreciation against greenback pegged at 22.1% as of July 2023
The Ghanaian cedi displayed remarkable stability against the US dollar in June 2023 and has continued its positive trajectory into July 2024, underscoring the success of the International Monetary Fund (IMF) programme on the nation’s economy.
According to data released by the Bank of Ghana, the Year-To-Date depreciation of the cedi stood at 22.1% as of July 21, 2023. Notably, this figure shows marginal fluctuations from the preceding months, recording 22.1% in March 2023, 21.7% in April 2023, 21.8% in May 2023, and 22.0% in June 2023.
Following a period of uncertainty in the initial months of 2023, marked by cedi instability, the local currency exhibited resilience against major foreign currencies, with the pound and euro witnessing a loss in value of 28.3% and 26%, respectively, as of July 2023.
Presently, on the retail market, the cedi trades at ¢11.70 against the US dollar, and ¢11.00 on the interbank market. However, a Bloomberg report reveals that the cedi has experienced a loss of about 14% on the retail market.
Analysts forecast a fairly stable outlook for the cedi on the forex market, driven by anticipated positive outcomes from the Mid-Year Budget Review this month and a successful evaluation of the International Monetary Fund programme. Such developments are expected to set the tone for the cedi’s trajectory in the latter half of 2023.
Last week, the cedi experienced marginal weakening against major currencies, with a 0.21% depreciation week-on-week against the US dollar, and 0.33% and 1.57% depreciation against the pound and euro, respectively. Factors contributing to this slight decline included poor forex liquidity and increased demand pressures. The Bank of Ghana refrained from intervening in the spot market, providing no support.
Despite this, the cedi is expected to find some cushion against volatility with an expected $20 million in bi-weekly forex support to Bulk Oil Distributors.
As Ghana continues to navigate its economic path, the stability of the cedi against the US dollar provides a reassuring signal of progress, while potential headwinds from major currencies necessitate a cautious approach in maintaining the positive momentum.
