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Business News of Saturday, 20 November 2021


Cedi depreciates by 2.6% to the dollar - BOG

cedi and dollar cedi and dollar

Despite being pegged at ¢5.91, the cedi is trading at ¢6.26

Last year’s depreciation of 3.9%, lowest in the history of Ghana’s economy

The Central Bank has adequate reserves ahead of the Christmas festivities

Data from the Bank of Ghana has revealed that the cedi has experienced a depreciation of 2.6% in almost 11 months of this year, compared to a 1.7% depreciation in the first 7-months of 2021.

The Bank of Ghana pegged the cedi to dollar rate at ¢5.91, despite its trading at about ¢6.26 on the interbank forex market.

The cedi’s rate of depreciation has stayed within analysts’ forecast for the year gearing towards the end of the year.

Indeed, the fall in the value of the cedi by 3.9% to the dollar the whole of last year, made it the lowest rate of depreciation in the history of the Ghanaian economy.

According to the November 2021 Summary of Economic and Financial Data, the cedi depreciated by 1.8% in September 2021 and 2.4% in October 2021 respectively.

Despite expected pressure for the last quarter of Christmas due to expected buying and importation, the cedi was projected to stay relatively stable because the Central bank has adequate reserves to take care of any pressure.

Senior Economic Analyst at Databank Research, Courage Martey, earlier told Joy Business that the cedi is well anchored despite some anticipated shocks.

“As we head into the final quarter of 2021, we are quite assured of continued relative stability but with a depreciation that will occur at a controlled or modest pace because already, we have a strong reserve buffer over five months of import cover. And from October [2021], we should start to see the tranche disbursement of the $1.5 billion Cocoa Syndicated facility which will strengthen the cedi to see out the rest of this year. So generally, we are very positive about the cedi.”

Fitch attributed a rebound of the global economy which will stimulate economic activities, as the rationale behind its end of year cedi to a dollar rate of ¢6.32, a little above 4% depreciation.

Databank on the other hand said the recent portfolio-induced pressure tampered with its earlier optimism. However, it believes the cedi should remain supported by the gross forex reserves of about $10.99 billion.

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