Cedi Loses 19.2% To Dollar – BoG


THE BANK of Ghana (BoG) has disclosed that the cedi lost 19.2 per cent in value to the US dollar in almost seven months of 2022.

According to the Summary of Economic and Financial Data by the Central Bank, the local currency went for GH¢7.43 to the American ‘greenback’ on the interbank market as of July 22nd, 2022.

It is, however, selling at about GH¢8.30 to the US dollar on the retail market.

Some currency analysts have attributed the lack of dollar inflows, particularly Eurobonds as the main reason behind the instability of the Cedi.

Others also believe the huge interest payments on borrowed loans by government are a major reason for the fall in value of the cedi.

The Ghana cedi depreciated by 16.86 per cent in value to the dollar in the first half of 2022 on the interbank market, but over 20 per cent on the retail forex market.

However, the rate of depreciation of the cedi slowed down in the May 2022 and June 2022, after stern monetary actions from the Bank of Ghana coupled with some fiscal measures to halt the free fall in the first four months of 2022.

Indeed, the Bank of Ghana increased the policy rate by 2.5 percentage points to 17 per cent in March 2022. Again, it enforced measures such as the increase in the Cash Reserve Ratio to 12 per cent, the reset of the Capital Conservation Buffer to the pre-pandemic level of 3 per cent and increased the Capital Adequacy Ratio to 13 per cent.

This move encouraged investors to invest in cedi-denominated assets, whilst inflation and money supply are effectively controlled.

Again, investors were reassured that managers of the economy were keeping close eye on the causes of the value of the cedi.


BY Jamila Akweley Okertchiri