Explainer: Why Ghana’s cedi continues to fall
- The Ghana Cedi continues to depreciate against major currencies in the world
- The depreciation of the cedi is a major issue in Ghana
- The IMF report us attributing the cedi depreciation to the country's low exchange reserve
- Our Manifesto: This is what YEN.com.gh believes in
Ghana’s currency, the cedi, has long ago stopped being a safe store of value and therefore a good instrument for investment because of the continuous fall in its value.
The confidence in the cedi has waned drastically over the last three years. What this means is that people with the cedi are dumping it for the foreign currencies, especially the dollar.
This behavior, in turn, causes the cedi to depreciate the more and frequently.
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According to tradingeconomics.com, the US dollar increased 0.0400 or 0.71% to 5.6800 on Thursday, January 9 from 5.6400 in the previous trading session.
The website also noted that historically, the Ghanaian Cedi reached an all-time high of 5.85 in March of 2019.
Meanwhile, the International Monetary Fund (IMF) report has revealed that the cedi depreciation is as a result of Ghana’s foreign exchange reserves remaining relatively low.
The IMF’s figures further indicated that Ghana’s gross international reserves for 2019 was US$5.1 billion, about 2.4 months of imports cover and forecast to reduce to US$5.01 billion in 2020 but rise slightly to US$5.06 billion in 2021.
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The IMF described the current situation as worrying because it believes any external shocks could have some dire consequences on the Ghanaian economy.
The Fund’s recent Ghana Assessment report, says the nature of the country’s economy and the persistent pressure on the exchange rate and international reserves, point to a weaker external position.
YEN.com.gh earlier reported that Board Chairman of the Ghana Revenue Authority (GRA), Professor Stephen Adei says the country exceeded its GHS43 billion tax revenue target for 2019.
According to the respected professor, the GRA excelled very well in December 2019 by collecting more taxes.
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Source: YEN.com.gh
