The Ghana Cedi has continued its bullish run against major international currencies with a huge gain in value, sending the US Dollar tumbling with a current exchange rate of $1 to GH¢6.8 at some forex exchange facilities.
The Bank of Ghana (BoG) average inter-bank market rate as of Wednesday, December 14, was GH¢9.30, but checks at some financial institutions, such as Stanbic Bank, showed $1 to GH¢6.8 on Thursday, December 15, 2022.
At the moment, the cedi is also trading at ¢10.38 to the euro and ¢12.40 to the pound, respectively, at Stanbic, while the national average by the apex bank is ¢9.89 to the euro and ¢11.52 to the pound.
This made the cedis the strongest performing currency against the American’ greenback’ in December 2022.
The cedi slumped more than 54% against the dollar before December 2022.
The cedi has strengthened by more than 33% since the beginning of December 2022 after Finance Minister, Ken Ofori-Atta, launched the government’s domestic debt exchange programme, followed by the latest announcement of the International Monetary Fund’s staff-level agreement of a bailout package worth $3 billion.
The Director of Research at the Bank of Ghana (BoG), Dr Philip Abradu-Otoo, has attributed the recent appreciation of the cedi to several measures put in place by the central bank, the government, as well as the recently announced International Monetary Fund (IMF) staff-level agreement on the three-year extended credit facility.
According to him, the drastic reduction in imports and other measures are largely responsible for the appreciation of the cedi.
“We had a glimpse of our trade data for November. If you check the data, it means there is huge compression in imports. Anytime there is an exchange rate overshoot like we saw, imports tend to go down,” Mr Abradu-Otoo stated.
Ashantibiz
