End of 2020: Cedi records 3.9% depreciation to dollar

The end of 2020 saw the cedi being named as one of the best-performing currencies in Sub Saharan Africa currency after it depreciated about 3.93% to the US dollar.

The 2020 performance of the cedi has been the best so far since 2017 when it depreciated by only 4.88%.

The rate of depreciation recorded at the forex bureau was even lower at 2.2%.

Joy Business reports that the local currency actually appreciated in the final two weeks of December 2020 at the forex bureau, from a depreciation rate of 3.1%.

Analysts have attributed the Bank of Ghana’s Forex Forward Auction and the diversified exports as some of the factors that brought about the cedis impressive performance.

“This sets a favourable entry into 2021. The expectations are for the GHS [cedi] to remain well supported in Q1-2021 [quarter one 2021] by the improved regulatory oversight, enhanced FX [foreign exchange] forward allotments and continued improvements in risk appetite of non-resident investors’, Courage Kingsley Martey, Senior Economic Analyst at Databank said.

Many analysts had earlier forecast that the cedi will end the year with a less than 5% depreciation to the dollar in 2020.

Recent historical performance of the cedi to dollar

2019 12.9%

2018 8.4%

2017 4.9%

2016 9.6%

2015 18.75%