Amin Adam blames cedi depreciation on payment to contractors and others

The Minister of Finance, Mohammed Amin Adam has blamed the rapid depreciation of the Ghanaian cedi on payment to contractors and high cedi liquidity among others.

Several financial analysts have projected that the Ghanaian will soon hit between GH¢16 to GH¢18 to the dollar.

Addressing the media at his monthly briefing on the economy, the sector minister also explained how the cedi has performed in the past and how it has stabilized against other currencies.

“But for recent pressures, we are seeing on exchange rate movements, the exchange rate has been largely stabilized with the depreciation of the cedi against the US Dollar halving from 54.2% at the end of Nov 2022 to 27.8% at the end of December 2023.

“The Cedi’s stability has continued into 2024, with a cumulative depreciation of 14.2% as of 20th May 2024, compared to 20.7% recorded in the same period in 2023,” Mr. Amin Adam stated.

He continued: “We expect the cedi’s stability to improve into the medium-term as we complete debt restructuring, make more progress on fiscal consolidation, and improve our reserves over the medium-term.”

Mr. Adam also indicated that the current pressures in the Cedi which he attributed to the “strengthening of the US Dollar against major trading currencies.”

“The recent pressures we are observing on the cedi is largely on the back of the strengthening of the US Dollar against major trading currencies, seasonal forex demand including elevated demand from corporate institutions, payment to contractors and to IPPs, high Cedi liquidity, and speculation,” he added.