The annual depreciation rate of the cedi against the US dollar between 2022 and 2024 stood above 19%.

This is compared with an average rate of depreciation of 9.4% between 2001 and 2021.

According to the Institute for Fiscal Studies, the cedi depreciation rate also remains very high, implying, again, that Ghana’s macroeconomic environment remains very unstable.

For instance, it said, using the end of period exchange rate, the annual depreciation rate of the cedi against the US dollar stood at as high as 19.2% in 2024.

Even though this is a significantly reduced rate compared with the 30.0% and 27.8% rates of cedi depreciation against the US dollar recorded in 2022 and 2023 respectively, it pointed out that it still represents a very high depreciation rate when compared with what the country had been able to achieve since the early 2000s.

“In fact, from 2001 to 2021, a period of 21 years, average annual depreciation rate of the cedi against the US dollar stood at only 9.4%. Interestingly, since 2001, with the exception of these three consecutive years (2022, 2023 and 2024), annual depreciation rate of the cedi against the US dollar of 19% and above has not lasted for more than one year before, as the situation is soon put under control”.

“From 2001 to 2021, annual depreciation rate of the cedi against the US dollar of 19% and above happened in only two non-consecutive years – 2008 and 2014”, it added.

Meanwhile, the local currency has remained relatively stable against the major foreign currencies so far this year.

Since the beginning of the year, it has lost about 0.97% in value to the US dollar. Its outlook remains positive.