Cedi sees fluctuations against major currencies
The Ghanaian cedi, which had been showing signs of stability against major currencies such as the US dollar, pound, and euro, has recently experienced a halt in its upward trajectory. On February 20, 2023, the cedi lost some of its stability against the dollar, trading at ¢12.90 at forex bureaus, a decline from the previous trading day’s rate of ¢12.75.
The same trend could be seen in the pound and the euro as the cedi was sold for ¢15.20 and ¢13.60, respectively. However, the Bank of Ghana quoted a dollar at ¢10.80 on the interbank market, suggesting a more favorable official exchange rate compared to the rates offered by forex bureaus.
This recent fluctuation in the value of the cedi against major currencies could be attributed to various factors, including economic conditions, political developments, and global events. The cedi had been showing improvements in value against the dollar for two weeks prior to the recent decline, largely due to the successful closure of the Domestic Debt Exchange Programme, which boosted confidence in the local currency.
While the cedi’s recent depreciation trend may be concerning to some, analysts suggest that a reversal in fortunes could be on the horizon with the expected support from the International Monetary Fund (IMF) programme in March 2023. The IMF has a track record of providing financial assistance to countries experiencing economic challenges, and their support could potentially help to stabilize the cedi and improve the country’s economic outlook.
It is important to note that fluctuations in exchange rates are common in the forex market, and businesses and individuals should take measures to mitigate risks associated with such fluctuations. This could include keeping up-to-date with the latest market trends, seeking professional advice before making significant financial decisions, and hedging currency risks through various financial instruments.
Furthermore, the Ghanaian government could take measures to improve economic conditions, boost investor confidence, and enhance the stability of the cedi. Such measures could include implementing policies that promote economic growth, reducing inflation, and maintaining stable political conditions. By taking these steps, Ghana could potentially attract more foreign investment, enhance its economic outlook, and increase the stability of its currency in the long run.
The recent fluctuations in the Ghanaian cedi’s value against major currencies such as the US dollar, pound, and euro, may cause some concerns for investors and businesses alike. However, with the expected IMF support programme in March 2023, and the implementation of sound economic policies, the cedi’s stability could potentially be restored, and the country’s economic outlook could improve.
