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Barring all unforeseen hitches, the Ghana cedi may record an impressive performance against foreign currencies, especially the dollar, in the year 2020.
This is set to be an improvement of its 2019 performance where it ended the year with an 8.33% rate against the dollar.
A number of factors are likely to push the cedi to an even better rate against the dollar and YEN.com.gh has sampled five possible reasons why this could be possible:
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1. The unpredictability of some global currencies given the outbreak of the coronavirus:
The outbreak of the coronavirus has led to the instability of some key world currencies such as the dollar.
This has positioned the cedi better to perform creditably in the year 2020
2. Political uncertainty in the United States of America (USA):
Reports of political instability in the United States of America have led to difficulties in measuring the performance of the dollar.
This has swung the odds in favour of the cedi and could lead to a creditable performance in 2020
3. Bi-weekly Foreign Forward Auctions and Spot Market interventions held by the Bank of Ghana (BoG):
Measures implemented by the Bank of Ghana have also helped with the performance of the cedi. Key among them is the bi-weekly Foreign Forward Auctions and Spot Market interventions.
4. The previous performance of the cedi:
The cedi appreciated by 1.68% to the US dollar in the first quarter of the year 2020. It, however, fell by 3.5% to the same currency in the next quarter.
The performance of the currencies in the course of the year have given market watchers reasons to conclude the cedi may perform creditably in 2020.
5. International rating:
Six months ago, the cedi, which cumulatively depreciated by about 13% to foreign currencies, especially the US dollar in 2019, begun to appreciate.
According to research by Bloomberg, the cedi was the best-performing currency against the US dollar out of 140 currencies the study tracked.
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