The local currency (cedi) continues to firm up, closing at GH¢12.00 to the US dollar on the forex market.
This is its strongest showing so far this year. The appreciation signals growing investor confidence in the economy, buoyed by strong fiscal consolidation efforts and tight monetary policy measures by the Bank of Ghana.
Checks by Citi Business News as at Wednesday May 21, showed that the cedi closed at GH₵12.10 to the US dollar at some forex bureaus.
The British Pound was selling at GH₵16.85 and the Euro going for GH₵14.60.
The performance of the cedi comes amid renewed foreign exchange inflows from improved export earnings, remittances and disbursements under Ghana’s IMF-backed programme.
Analysts also point to the Central Bank’s intensified regulatory oversight in the forex market, which has helped curb speculative pressures and align market rates more closely with fundamentals.
From the fiscal side, there is an intention to arrive at this point and that is why I hold the view that, it is not accidental”, Prof. Godfred Bokpin of the University of Ghana Business School said.
Also, the Bank of Ghana is stepping up key reforms to lock in the recent gains of the cedi.
Governor, Dr. Johnson Asiama believes, the appreciation has helped ease “imported inflation pressures and restore public confidence”.
It reflects a combination of factors, including prudent monetary policy, improved market sentiment and external sector gains”, he added.
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