Cedi weakens against dollar

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The local currency, the Cedi weakened further against the dollar this week, depreciating to 6.282 from 6.280 at last Friday’s close as supply of foreign exchange lagged demand.

AZA Finance, Africa’s largest non-bank currency broker by trading volume at over $1 billion annually, which disclosed this in its recent newsletter, stated that in the “shorter term, we expect the Cedi to continue trading weaker given constrained supply of dollars.”

Indicating that Ghana signed an agreement with Rwanda to strengthen trade and economic ties between the two countries, it said such agreement should help to boost exports, attract investment and drive more tourism-related activities in Ghana.

In its latest Monetary Policy Committee (MPC) report, Governor of the Bank of Ghana, Dr Ernest Addison, indicated that gross international reserves as at December 2021, stood at US$9.7 billion (equivalent to 4.4 months of import cover).

“This compares with a reserve position of US$8.6 billion (4.0 months of import cover) at the end of 2020. Gross Reserves have since increased to US$9.9 billion as at 28th January 2022.”

He added that such strong reserve position provided some buffers for the local currency in 2021.

“Cumulatively, while the Ghana Cedi depreciated by 4.1 percent and 3.1 percent against the US Dollar and Pound Sterling, respectively in 2021, the Ghana Cedi 5 appreciated by 3.5 percent against the Euro. In the same period of 2020, the Ghana Cedi recorded depreciations of 3.9 percent, 7.1 percent, and 12.1 percent against the US Dollar, the Pound Sterling, and the Euro, respectively.”

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