Ghana’s local currency, the cedi depreciated by 21.7 percent to the dollar in May 2023 compared to the depreciation rate of 15.9% recorded in May 2022.
The cedi also lost its value by 24.6 percent to the pound and 23.2 percent to the euro for the same period on the interbank bank foreign exchange market.
Per the trends, the percentage of the depreciation of the cedi against the dollar since the beginning of the year stood at 20.6 percent in January 2023, 22.1 percent in both February and March 2023 and 21.7 percent for March and April 2023 respectively.
These were captured in the Bank of Ghana’s Summary of Economic and Financial Data for May 2023.
The Central Bank’s report is coming at a time, Bloomberg had reported that the cedi strengthened by 5.3% on May 15, 2023, the most since April 3, 2023.
According to Bloomberg, the Ghana Cedi, outperformed all other global currencies against the US dollar over the past six months,
Bloomberg’s currency tracker showed that the local currency’s remarkable 33% gain since November marks the highest among approximately 150 tracked currencies.
Investors have also enjoyed strong returns from Ghana’s dollar bonds, delivering nearly 12%, surpassing the 3.6% average for emerging and frontier markets in a Bloomberg index.
Fitch Solutions has also predicted that the Ghana cedi will end 2023 at a rate of ¢12.40 to one US dollar, which is a significant improvement from the 38% depreciation recorded in 2021.
Despite short-term exchange rate volatility, Fitch Solutions believes that the cedi will eventually stabilize given Ghana’s programme with the International Monetary Fund.
Currently, the cedi is trading at about GHS 11 to a dollar with analysts predicting that the value of the cedi will further shore up.