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Business News of Saturday, 1 February 2020

Source: www.ghanaweb.com

Cedi appreciates amongst three major trading currencies for January 2020 – BoG report

According to data released by the Central bank, the local currency has appreciated against all the three major currencies, the dollar, euro and pound sterling in the first month of January 2020.

The Bank of Ghana’s (BoG) latest Summary of Economic and Financial Data indicated that the cedi has in January 2020 appreciated 0.3 percent against the dollar, and made a 1.9 percent gain on the British pound, while it recorded a 2.3 percent appreciation against the Euro.

The Bank of Ghana says the cedi’s performance follows the banks resolve to put in a number of stringent measures and reforms in determining the currency’s recurring struggles against its major trading partners.

In 2019, the cedi saw a depreciation against all the three currencies but has now regained grounds amongst economic trading partners. The cedi depreciated 12.9 percent, 15.7 percent and 11.2 percent against the dollar, pound and euro respectively.

The Bank of Ghana recently announced the beginning of forward forex (FX) auctions which enables banks and other dealers to make early payment purchases of foreign currency to be supplied at an agreed rate later on.

According to the central bank, the move was adopted to help in regulating the supply of foreign currency and to stabilize the cedi for some time.

The BoG auction committee, earlier issued in a statement that it will accept less than fifty percent of the total amount of bids submitted by banks in the forex forward sales for Tuesday, January 28, 2019.

On Friday, January 31 the Central bank announced that it has kept its Monetary Policy Rate unchanged at 16 percent in a bid to stabilize the cedi from depreciation.

According to the Governor of the bank, the economy presents a fairly resilient and robust performance with regards to output growth and a strong trade and payments position.

It added that the economy is positioned firmly on the path of stability with inflation forecasted to stay within the medium term target band of 8±2 percent, barring any unanticipated shocks.

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