The cedi has lost about ¢3.15 at face value to the US dollar so far in 2022.
This is equivalent to about 32% loss since the beginning of the year.
According to Bloomberg, the cedi has lost 155% in value to the dollar since the redenomination of the local currency in 2007.
The local currency ended 2021 with a rate of ¢6.49 to one US dollar and 2016 with a rate of ¢4.33 to one American ‘greenback’.
So far this year, the cedi has come under severe pressure as some foreign holders of Ghana’s Eurobonds have been selling off their stakes, largely because of the perceived negative outlook of the Ghanaian economy.
Together with other factors, they have caused the high demand for the dollar, which is presently going for ¢9.70 on the retail market or forex bureaus.
This followed recent downgrades of the country’s credit rating by ratings agencies, Fitch, Moody’s and S&P.
The significant loss in the value of the cedi means businesses that depend on imports for production may have to spend more to run their operations.
Similarly, the cost of capital of most firms have declined, thus worsening their state of operations.
BoG assures of cedi stability
However, the Bank of Ghana has given assurance that the cedi’s stability will be restored soon, based on certain measures that are being put in place.
They include cooperation agreement with the mining companies to provide the Central Bank with the opportunity to buy gold as and when it becomes available and foreign currency liquidity support to the banking sector to help meet demand for external payments and the intended economic programme the country will have with the International Monetary Fund.
Meanwhile, the $750 million commercial loan approved by Parliament last month is expected to hit the account of the Bank of Ghana latest this Thursday, August 18th, 2022.
This is expected to help offset the demand for dollars in recent days.
The government will also be able to use part of the inflows to service imminent maturing foreign debt.
Recent historical performance of the cedi to dollar
YEAR DEPRECIATION RATE
2021 | -8.71% |
2020 | -3.93% |
2019 | -12.9% |
2018 | -8.4% |
2017 | -4.9% |
2016 | -9.6% |
2015 | -11.9% |
2014 | -32.45% |
Latest Stories
-
Paris 2024: Opening ceremony showcases grandiose celebration of French culture and diversity
3 hours -
How decline of Indian vultures led to 500,000 human deaths
4 hours -
Paris 2024: Ghana rocks ‘fabulous fugu’ at olympics opening ceremony
4 hours -
Trust Hospital faces financial strain with rising debt levels – Auditor-General’s report
5 hours -
Electrochem lease: Allocate portions of land to Songor people – Resident demand
5 hours -
82 widows receive financial aid from Chayil Foundation
5 hours -
The silent struggles: Female journalists grapple with Ghana’s high cost of living
5 hours -
BoG yet to make any payment to Service Ghana Auto Group
5 hours -
‘Crushed Young’: The Multimedia Group, JL Properties surprise accident victim’s family with fully-furnished apartment
6 hours -
Asante Kotoko needs structure that would outlive any administration – Opoku Nti
6 hours -
JoyNews exposé on Customs officials demanding bribes airs on July 29
7 hours -
JoyNews Impact Maker Awardee ships first consignment of honey from Kwahu Afram Plains
8 hours -
Joint committee under fire over report on salt mining lease granted Electrochem
8 hours -
Life Lounge with Edem Knight-Tay: Don’t be beaten the third time
8 hours -
Pro-NPP group launched to help ‘Break the 8’
9 hours