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Cedi depreciation slows down; now sells at about ¢7.84


The cedi appears to be responding positively to the recent increment in the Policy Rate by 2.5 percentage points to 17% and other actions taken by the Bank of Ghana to address its depreciation.

The local currency traded below ¢8 to the US dollar at most forex bureaus and banks, yesterday, March 23rd, 2022. Same were said of the British pound and the euro.

In actual fact, the cedi appreciated by 1.20% to the dollar, 0.47% to the pound and 1.52% to the euro respectively on March 23rd, 2022. However, in terms of the year-to-date, the local currency has lost about 15% in value to the dollar.

The local currency can further reverse its lost fortunes and slowdown the rate of depreciation significantly after the announcement of the expected fiscal measures by the Finance Minister, Ken Ofori-Atta, later today, March 24th, 2022.

Currency Analyst, Courage Martey, had earlier told Joy Business that the cedi will soon improve upon its ailing performance against the dollar.

In the interim, we’ll say its early days yet. In addition to that, the cedi also has a history about its performance and so we will also want to look forward to what the Minister of Finance [Ken Ofori-Atta] will be delivering as far as the fiscal decisions are concerned. From that point and the weeks ahead, we’ll start to analyze the foreign exchange market to see how the cedi will react to some of these announcements”.

Read also: Cedi-dollar exchange rate pegged at GHS 7 at end-2022

But on the face of it, this appeared to be good measures; aggressive and decisive measures from the Central Bank which we expect to be backed by the fiscal measures, so that going forward the market – at least sentiments – should start to improve. Once it’s starts to improve, we should start to see it reflecting in the pricing behavior of participants on the market”, he added.

The increase in the policy rate by 2.5 percentage points to 17% is expected to entice investors to acquire cedi denominated instruments because of the attractive yields they will come with.

Though cost of borrowing will go up, while cost of living and doing business will also surge, the Central Bank will in the interim mop up excess liquidity in order to control inflation and reduce interest in dollar denominated assets.

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