Depositors prefer foreign currencies to the cedi - New report shows

- A report from the Bank of Ghana shows that customers of Ghanaian banks prefer foreign currencies over the cedi

- This follows a fall in the value of the cedi against currencies such as the United States dollar

- It has been gathered that there was an increase in deposits of foreign currencies to GHc22.6 billion and GHc23.3 billion in April and May respectively

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Information available to YEN.com.gh shows that customers of banks in Ghana have resorted to foreign currencies following a fall in the value of the Ghanaian cedi.

The cedi reportedly lost value against currencies such as the US dollar in the second quarter of 2020.

The May 2020 Statistical Bulletin released by the Bank of Ghana (BoG) also shows that deposits of foreign currencies increased to GHc22.6 billion and GHc23.3 billion in April and May respectively.

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Per a report by thebftonline.com, the cedi depreciated by 1.21 percent and 1.55 percent respectively in the same months. In comparison to the first quarter of 2020, deposits of foreign currencies fell in February and March to GHc21.9 billion and GHc21.8 billion respectively.

Details show these were the same months in which the cedi recorded its biggest gains against the dollar by appreciating at 4.8 percent and 1.66 percent respectively.

According to the Governor of the Bank of Ghana, Ernest Addison, “the cedi reflects many factors."

He said:

It reflects our domestic economy. It reflects developments in the global economy, and If you look at that has happened worldwide, we have seen capital leave jurisdictions such as ours into the advanced economies.

Now, when that happens it has an impact on the availability of dollars in Ghana, and that can trigger depreciation of the currency”.

In other news, YEN.com.gh has learned that the Bank of Ghana (BoG) will soon build additional reserves of up to GHc300 million to deal with depreciation.

The move forms part of plans to stabilise the cedi and prevent a free fall.

The currency has performed creditably in the first half of the year compared to major currencies such as the dollar and the Euro.

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Source: YEN.com.gh