Africa-Press – Ghana. Dr. Mohammed Amin Adam, the Finance Minister, has asserted that the Ghanaian cedi has witnessed a cumulative depreciation rate of 14.2 percent year-to-date compared to 27 percent recorded in the same period of 2023.
This, according to him, suggests that the cedi has been largely stabilised, emphasising that the local currency is still very strong against major trading currencies like the US dollar.
Currently, the cedi is selling around GHC15.20 to one US dollar at Forex Bureaus.Dr Amin Adam made the remarks at his monthly press briefing on the economy, on Friday, May 24, 2024.
He indicated that the cedi depreciation of 22.7 recorded as of the end of 2023 was about half of the 54.2 percent recorded at the end of 2022.
Moreover, the Finance Minister underscored that the cedi is expected to strengthen in the medium term following the completion of the domestic debt exchange program.“But for recent pressures we are seeing on exchange rate movements, the exchange rate has been largely stabilised with the depreciation of the cedi against the US Dollar halving from 54.2% at the end of Nov 2022 to 27.8% at the end of Dec 2023.
“The Cedi’s stability has continued into 2024, with a cumulative depreciation of 14.2% as of 20th May 2024, compared to 20.7% recorded in the same period in 2023. So on that comparative basis we are safe to conclude that the cedi is still strong, very strong,” he emphasised.
“We expect the cedi’s stability to improve into the medium-term as we complete debt restructuring, make more progress on fiscal consolidation, and improve our reserves over the medium-term.“The recent pressures we are observing on the cedi is largely on the back of the strengthening of the US Dollar against major trading currencies, seasonal forex demand including elevated demand from corporate institutions, payment to contractors and to IPPs, high Cedi liquidity and speculation,” Dr. Amin Adam added.Meanwhile, the President of GUTA, Dr. Joseph Obeng, paints a disturbing picture of the dire consequences of the depreciation of the cedi for members of the association, forcing some businesses to fold up.
According to him, businesses have lost about 20 percent of their capital due to exchange rate volatility.“Depreciation is simply a loss of capital so if the currency is depreciating this much, for now we can confidently say most of us have lost about 20% of our capital,”.
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