Restoring confidence in the cedi
Adnan Adams Mohammed
The
local currency, Ghana Cedi, has for some continuous years suffered rapid
depreciation against major international trading currencies.
These
have affected stability of goods and services in the country, contributing to
high inflation and cost of living and doing business in the country over the
years.
It
has brought about citizens and businesses calling for measures to strengthen
the Cedi, especially, during festive periods and beginning of the every year.
The
good news is that, the Bank of Ghana has so far has received US$1billion of the
cocoa syndicated loan signed a couple of months ago.
The
US$1 billion is expected to provide balance of payment support, improve the
country’s Gross International Reserves, and also provide some support for the
fiat currency, the Ghana cedi.
The
Gross International Reserves (GIR) increased by US$1.67 billion to US$8.70 billion
as at November, providing cover for 4.2 months of imports. This compares with
the end December 2018 position of US$7.02 billion equivalent to 3.6 months of
import cover.
The
Ghana cedi has depreciated by 10.4 percent against the US dollar as at November
compared with an 8.1 percent depreciation for the corresponding period in 2018.
Against the British pound and euro, the Ghana cedi cumulatively depreciated by
11.2 percent and 7.4 percent respectively, compared with 2.6 percent and 2.8
percent over the corresponding period in 2018.
In
trade-weighted terms, the real effective exchange rate continued to be broadly
aligned with the underlying fundamentals.
the
Although,
the Cedi achieved slight stability over five months this year, much
is still needed to be done to improve its stability.
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