- The depreciation of the CEDI is predicted to slow down following some key actions by the Bank of Ghana
- The Central Bank injected about $28 million into the market on August 28, 2024, among other actions
- The cedi, however, depreciated by 1.84 percent against the US dollar, 1.43 percent against the pound and 0.42 percent against the euro
The depreciation of the cedi is predicted to slow down following some intervention by the Bank of Ghana in the foreign exchange market.
Demand pressure on the cedi is also expected to ease.
The Bank of Ghana pumped about $28 million into the market on August 28, 2024. This was after a seven-day forward auction.
An additional $20 million was advanced to Bulk Oil Distribution Companies to help meet dollar demand.
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These interventions kept the cedi stable for the rest of the week as demand pressures seemed to have faded.
However, in the retail market last week, the cedi depreciated by 1.84 percent against the US dollar, 1.43 percent against the pound and 0.42 percent against the euro.
This pushed the dollar to close the week at GH¢16.28 in the retail market.
Since the beginning of the year, the local currency has lost about 24% in value against the US dollar.
Cedi forecast to end the year flat
The Ghanaian cedi is expected to depreciate only moderately between now and the December elections.
The cedi is considered the fifth worst performing currency of the year by Bloomberg.
Bloomberg reported that Ghana may end the year at GH¢15.97 to the dollar, according to Oyinkansola Samuel, an analyst at FirstRand Ltd’s RMB Nigeria unit.
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The cedi has been hit by this year’s poor cocoa crop, which provides Ghana with a vital source of foreign exchange earnings.
During the protracted debt restructuring talks amid the default, there were also investor concerns that led Ghana to seek IMF support.
The finance minister blames the debt on the devaluation of the CEDI
YEN.com.gh reported that the Minister of Finance, Dr. Mohammed Amin Adam, blamed the country’s mounting debt on the rapid devaluation of the cedi.
The country’s debt has risen to a staggering GH761.1 billion, equivalent to $51.1 billion, from GH587.7 billion, equivalent to $53.5 billion.
The minister also blamed the situation on disbursements from multilateral institutions and domestic budget funding.
Corrected by Berlinda Entsie, reporter and copy editor at YEN.com.gh
Source: YEN.com.gh