NPP delegates congress: Cedi experienced lowest depreciation since 1992 - Bawumia

NPP delegates congress: Cedi experienced lowest depreciation since 1992 - Bawumia

  • Dr. Mahamudu Bawumia says the cedi performed better since 1992, the vice president argues that the rate of depreciation has plummeted
  • The Vice President has come under a barrage of criticism over the economic management of the country amid a high public debt stock
  • Dr. Mahamudu Bawumia will be contesting the presidential candidacy of the New Patriotic Party, alongside Alan Kyeremanten

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The Vice President, Dr. Mahamudu Bawumia, has argued that the local currency has experienced the slowest rate of depreciation against the dollar in 30 years.

Addressing members of the incumbent party in the NPP national delegates conference, the Vice President makes the case that his administration has put in place all the fiscal measures necessary to keep the cedi strong against the dollar.

NPP delegates congress: Cedi experienced lowest depreciation since 1992 - Bawumia
NPP delegates congress: Cedi experienced lowest depreciation since 1992 - Bawumia. Photo: Getty Images

According to the Bank of Ghana, the average exchange rate depreciation over the last four years (7.3%) is the lowest for any first term government since 1992. The year 2020 recorded one of the lowest rate of depreciation in the last 28 years. The cumulative exchange rate depreciation of 2.6% in November 2021 the year is lower than 9.7% depreciation recorded in 2016. For the first time in over two decades, the trade balance (the difference between what we export and what we import) recorded a surplus for four consecutive years from 2017-2020, he stated.

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Bawumia has come under criticism over his handling of the economy. With a burgeoning debt stock, economists have warned of a potential ballooning debt if not dealt with immediate effect.

Cedi drops in value by 2.6 percent in 11 months, expected to hit 6.32 by end of year

Ghana cedi has declined by 2.6% in about 11 months this year, which is projected to be much better, according to data from the Bank of Ghana.

This compares with a 1.7% decline in the first 7 months of 2021. The Central Bank estimated the cedi dollar rate at ¢ 5.91, although it trades at ¢ 6.26 in the interbank forex market.

However, the rate of cedi inflation indicates that local funding will remain within the research facilities and analysts' forecast for this year, with six weeks to go before the end of the year.

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Indeed, the 3.9% cedi depreciation rate to the dollar over the past year has led to the lowest inflation rate in Ghana's economic history.

According to the November 2021 Summary on Economic and Financial Data, cedi decreased by 1.8% and 2.4% in September 2021 and October 2021 respectively.

The Cedi forecast will end the year between ¢ 6.14 and ¢ 6.32 to the dollar. Fitch Solutions, the research agency of the rating agency, Fitch, and Databank Research, at the beginning of the forecast is a slightly different end of the year rate for cedi and dollar.

While Fitch Solutions rated ¢ 6.32 dollars at the end of the year, Databank Research predicted between ¢6.14 and ¢6.25.

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