Cedi depreciates 14.6% to the dollar; 11.6% to the Euro and Pound
The depreciation of the Cedi as at mid-March 2022, has been pegged at 14.6 percent by the Bank of Ghana (BoG).
Data made available by the Central Bank via its Summary of Economic and Financial Data report indicates that the cedi within the last three months of 2022 has depreciated by 14.3 percent.
Per the BoG, the cedi at end-January 2022 depreciated by 0.3 percent to the dollar, but by the end of February 2022 the cedi had depreciated by 9 percent to the dollar.
The cedi’s depreciation worsened further as it depreciated by 14.6% to the dollar by mid-March 2022.
Against other major trading currencies such as the British Pound and Euro, the cedi has depreciated by some 11.6 percent against both currencies.
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 11.6% by mid-March 2022.
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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 11.6% by mid-March 2022.
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 recent downgrades of the nation’s Eurobonds, increased demand for dollar, half-decade high inflation, and dwindling confidence in the nation’s policy credibility, among others.
