Report shows cedi’s depreciation to the dollar could be less than 5 percent
- A number of factors have led to the depreciation of the cedi against the dollar
- These factors include healthy secondary reserves, the unpredictability of some currencies, and political instability in the USA
- The expected 2020 year-to-date rate of 5% has been judged as better compared to the 8.33% recorded in 2019
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YEN.com.gh has learned that the Ghana cedi is likely to end the year 2020 with less than 5 percent depreciation to the dollar.
Information available shows this is a better statistic compared to the 8.33 percent recorded in 2019.
From January 2020, the cedi lost 24 pesewas, or 2.6 percent, of its value to the dollar and market watchers have attributed its strong performance to bi-weekly Foreign Forward Auctions and Spot Market interventions held by the Bank of Ghana (BoG).
Source: UGC
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Per a report by myjoyonline.com, this was supported by healthy secondary reserves, equivalent to about 4.3 months of imports.
The fall in the value of the dollar has also been linked to the unpredictability of some global currencies given the outbreak of the coronavirus.
Political uncertainty in the United States of America (USA) proved to be another key factor for its performance.
YEN.com.gh understands that in the first quarter of the year 2020, the cedi depreciated by 1.68 percent to the US dollar but fell by 3.5 percent to the same currency in the next quarter.
The cedi’s performance against the dollar was pegged at 18.75 percent, 9.6 percent, 4.9 percent, 8.4 percent, and 12.9 percent in the years 2015, 2016, 2017, 2018, and 2019 respectively.
In other news, the Ghana cedi, which cumulatively depreciated by about 13 percent to foreign currencies, especially the US dollar in 2019, later experienced an appreciation.
According to research by Bloomberg, the cedi was the best-performing currency against the US dollar out of 140 currencies the survey covered.
The statistics and data by Bloomberg also indicated that local currency, as at February 3, 2020, had appreciated by 3.4 percent against the dollar.
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Source: YEN.com.gh
