Cedi decline in value by 19.2%, 8.8% against dollar and Pounds in first 6 months of 2022
The depreciation of the Cedi as at mid-July 2022, has been pegged at 19.2 percent by the Bank of Ghana (BoG).
Data made available by the Central Bank in its July 2022 Summary of Economic and Financial Data report indicates that the cedi within the last seven months of 2022 has depreciated by 19.2 percent.
Per the BoG, the cedi at end-January and end-April 2022 depreciated by 0.3 percent and 15.6 percent to the dollar, but by the end of July 2022 the cedi had depreciated by 19.2 percent to the dollar.
The cedi’s depreciation marginally worsened as it depreciated by 16.9% to the dollar by June 2022.
Against other major trading currencies such as the British Pound and Euro, the cedi depreciated by some 8.8 percent and 10 percent respectively.
Appreciating against the British Pounds by 0.5 percent by end-January 2022, the cedi by end-February 2022 had depreciated by 8.2% and further to 13.1% by mid-March 2022.
In June, the cedi’s depreciation rate against the British Pounds had slowed to 7.7%. The cedi in July 2022, however, depreciated by 1.1% to reach a depreciation rate of 8.8% to the British Pounds.
In a similar fashion, the cedi against the Euro appreciated by 1.1 percent at end-January 2022, but then depreciated by 7.9% at end-February 2022 and further to 13.6% by mid-March 2022.
By mid-May the cedi’s depreciation rate against the Euro had slowed to 8.9%. The cedi in July 2022, however, depreciated to reach a depreciation rate of 10% to the Euro.
The depreciation of the Euro is a bit unusual as the cedi normally appreciates against the Euro. For instance, throughout the whole of 2021, the cedi appreciated against the Euro ending 2021 with an appreciation rate of 3.5% against the Euro.
The fast depreciation of the cedi against the major trading currencies particularly the dollar, can be attributed to the downgrade of the nation’s sovereign bonds, increased demand for dollar, high inflation rate, and dwindling confidence in the nation’s policy credibility, among others.
