Cedi depreciated by 2.7 percent from January to November this year
Between January and November 2020, the cedi depreciated by 3.9 percent
Ghana has recorded a BoP surplus of $1.7 billion
The Governor of the Bank of Ghana (BoG), Ernest Addison, has said the performance of the cedi in relation to other currencies was better for 2021 as compared to 2020.
“Cumulatively, the Ghana Cedi recorded a year-to-date depreciation of 2.7 percent against the US dollar in November 2021, compared with 3.9 percent depreciation in the same period of 2020”, he said.
This implies that the rate of the depreciation of the cedi has reduced by over 33 percent, comparing the performance in 2020 to 2021.
The Governor, who disclosed this at the 2021 Annual Bankers Week Dinner, attributed the strong performance of the cedi to the effectiveness of the policies the government put in place to combat the effects of the COVID-19 pandemic and the special drawing rights (SDRs) allocated to Ghana by the International Monetary Fund (IMF)
“The supportive policy environment and the effective manner in which the government managed the Corona Virus allowed confidence to remain strong in the Ghanaian economy, resulting in higher inflows from foreign direct investments, portfolio flows, in addition to the IMF SDR allocation”, he said.
He said the inflows together with IMF SDR allocation supported the build-up of international reserves to US$10.8 billion (equivalent to 4.9 months of import cover) in October 2021 from US$8.6 billion (representing 4.0 months of import cover) at the end of December 2020.
“All these put together led to a balance of payments surplus of $1.7 billion, higher than the US$334 million surpluses recorded a year ago,” he added.
This, he explained provided enough cushion in the foreign exchange market as demand pressures from corporates, importers, and offshore investors increased since October 2021.