Cedi declines: According to the Bank of Ghana’s May 2023 Overview of Economic and Financial Statistics, the value of the Ghana cedi relative to the US dollar decreased by around 21.7% in the interbank forex market as of this month.
Bloomberg reports that the local currency has had a phenomenal run in the retail sector, losing around 8% so far this year.
According to Bloomberg, the cedi has outperformed all other currencies in the globe during the last six months when compared to the dollar. Since November 2022, it has gained 33%, the most among around 150 other currencies, reversing some substantial losses.
Depreciation this year
The cedi depreciated at a rate that was essentially the same as that of May 2023 in January 2023 (20.6%), February 2023 (22.1%), March 2023 (22.1%), and April 2023 (21.7%).
Until the cedi stabilizes in March 2023 against the dollar, the first two months of this year were not promising. Since then, its exchange rate for the major foreign currencies has shown some consistency.
The value of the local currency decreased in May 2023 by 24.6% for the pound and 23.4% for the euro. Currently the cedi is now ¢10.83 on the interbank market and ¢11 against the American greenback on the retail market.
Stability of the Cedi from March 2023
The cedi has been relatively stable against the dollar since late March 2023 until Friday, May 19, 2023. Investors held out some modest hope that Ghana will be granted IMF deal approval in the 2nd quarter of 2023.
“Right away on Friday May 12, 2023, we observed it reflected in the performance of the Ghana cedi, with the local currency rising 1.0% only on Friday. Gains have continued into this week as the market anticipates the approval this week, widely reported today, as indicated by government authorities.” Economist Courage Martey announced.
“In conclusion, sure. The most recent good news from the expected IMF program approval is what’s behind the recent run of the Ghanaian cedi appreciation, he continued.