Year-to-date: Cedi depreciates by 12.7% to dollar; second weakest among top African currencies

 

With only 17 days into the year, the Ghana cedi has depreciated by about 12.7% to the US dollar.

The significant fall in the value of the cedi which occurred yesterday, January 16, 2023 and today, January 17, 2022 places the local currency as the second weakest currency among 15 top currencies in Sub-Saharan Africa.

The Egyptian pound is the weakest currency among the 15 top currencies in Sub-Saharan Africa. Its economy is also battling with high debt levels, rising inflation and increasing cost of living standards.

The woes of the cedi is not getting better as anticipated as the local currency is being sold at about ¢13.10 pesewas to the dollar on the forex or retail market.

The situation is also not better against the Euro and the British pound. It is selling at about ¢13.70 to the euro and ¢15 to the pound.

The Bank of Ghana however quoted a dollar at ¢10.34.

Indeed, the country’s Net Foreign Assets is in a negative position, a situation compounding the cedi’s performance.

The Governor of the Bank of Ghana, Dr. Ernest Addison, at a Public Accounts Committee meeting indicated that the pressure on the Ghanaian economy is the reason behind the depreciation of the cedi.

He is however optimistic that the government barter of gold-for-oil policy will help reduce the foreign exchange pressures on the economy and thereby stabilize the local currency.

He is also hopeful the rapid depreciation of the cedi experienced last year will not occur this year.

The Ghana Cedi also ended 2022 as the second weakest currency on the African continent with a year-to-date loss of 38.86% to the US dollar, according to Bloomberg.

Globally, the local currency placed 145^th. The Sierra Leone Leone came 146^th whilst the Argentina Peso and Sierra Lankan Rupee placed 147^th and 148^th respectively.

They were classified as the currencies with the “Worst Spot Returns” by Bloomberg.

All these countries had challenges with their economies as debt levels had become unsustainable, whilst budget deficits had worryingly enlarged.

AFRICAN CURRENCIES PERFORMANCE

CURRENCIES	YEAR-TO-DATE	RANKING
Morocco dirham	3.09%	1st
Côte d’Ivoire	1.82%	2nd
Uganda shilling	1.21%	3rd
Botswana Pula	1.15%	4th
Namibia dollar	1.14%	5th
Tunisia dinar	1.14%	6th
Malawi kwacha	0.00%	7th
Tanzania shilling	-0.01%	8th
South African rand	-0.21%	9th
Mauritius rupee	-021%	10th
Kenya shilling	-0.42%	11th
Nigeria naira	-0.89%	12th
Zambia kwacha	-1.93%	13th
Ghana cedi	-12.77%	14th
Egypt pound	-16.50%	15th