The rate of depreciation of the Ghana cedi has slowed down, as the local currency went down by a little above 0.20% to the dollar the whole of last week.
This will come as good news to businesses, importers and consumers who are worried about the rapid decline in the value of the local currency.
The cedi has however lost 14.44% to the American currency since the beginning of the year, and still ranks last as Africa’s top performing currencies.
The Bank of Ghana quotes the local currency at ¢7.02 to the US dollar on the Interbank Forex Market. However, it is going for about ¢7.22 to the dollar on the retail market, but some forex bureaus and banks are selling it at a higher rate.
It is unclear whether proceeds from the 5-year bond which the interest cost was 20.75% contributed to the slowdown in depreciation of the local currency.
The Monetary Policy of the Bank of Ghana will be meeting this week and the expected increment in the policy rate will entice investors to invest in government securities rather than buying dollars, a move that will help slowdown the depreciation of the cedi further.
An increase in the policy rate will however mean cost of credit or loans will go up.
Chief Finance Officer of the Valley View University, Dr. Williams Peprah, earlier told Joy Business the Bank of Ghana should increase interest rates in the country to help stop the free fall of the Ghana cedi.
According to him, increasing interest yield will entice investors to purchase more government securities and help slowdown the depreciation of the cedi, despite the difficulty it will bring to the economy.
“When a country’s currency is suffering from devaluation, as we have experienced in Ghana in the first 2 months of the year, where we have the worst performing currency, the only alternative to stop the devaluation is from increasing interest rates in the country”.
AFRICA'S TOP CURRENCIES
| CURRENCY | YEAR-TO-DATE PERFORMANCE | RANKING |
| Namibian dollar | 5.54% | 1st |
| South African rand | 5.35% | 2nd |
| Botswana pula | 1.17% | 3rd |
| Egypt pound | 0.00% | 4th |
| Malawi kwacha | 0.00% | 4th |
| Tanzania shilling | -0.03% | 6th |
| Uganda shilling | -0.68% | 7th |
| Nigeria naira | -0.63% | 8th |
| Kenya shilling | -0.91% | 9th |
| Mauritius repee | -0.96% | 10th |
| Tunisia dinar | -1.77% | 11th |
| Côte d'Ivoire CFA | -2.77 | 12th |
| Morocco dirham | -4.37% | 13th |
| Zambia kwacha | -8.63% | 14th |
| Ghana cedi | -14.44 | 15th |
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