Home Economy Dollar Starts the Week at GH¢15.75 at Forex Bureaux

Dollar Starts the Week at GH¢15.75 at Forex Bureaux

Central Bank indicate an improvement in Ghana’s Gross International Reserves

by Vesta Daily
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Dollar Starts the Week at GH¢15.75 at Forex Bureaux

This surge represents a major depreciation of the cedi, which has plummeted by more than 19% on the retail market due to increased demand for the dollar and insufficient availability of the US currency.
The US dollar is now selling for GH¢15.75 cedis at various forex bureaux in Accra, up from GH¢15.30 the previous week.

This surge represents a major depreciation of the cedi, which has plummeted by more than 19% on the retail market due to increased demand for the dollar and insufficient availability of the US currency.

Several causes have contributed to the cedi’s diminishing value. These include growing corporate demand and insufficient inflows from Ghana’s main commodities, particularly cocoa. Finance Minister Dr Mohammed Adam also cited a strong dollar, an increase in cedis in circulation due to payments to contractors and independent power producers (IPPs), and speculative activity as factors leading to the cedi’s depreciation.

During a press event on Friday, May 24, Dr Adam highlighted several ways to halt the cedi’s depreciation. These initiatives included reducing government spending while increasing income mobilization, expanding the Gold-for-Oil program, and adopting appropriate forex interventions via the Central Bank. Additionally, the government anticipates receiving approximately $2.32 billion from various sources between now and the end of the year.

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Despite these pronouncements, the cedi’s value continued to fall over the weekend. On Monday, May 27, Dr. Ernest Addison, Governor of the Bank of Ghana, is set to brief the media on the state of the economy and the Monetary Policy Committee’s (MPC) decision on the policy rate following their three-day meeting.

The falling value of the cedi hinders efforts to reduce the policy rate from its current 29%, as several renowned economists have advocated.
Meanwhile, the Central Bank’s most recent economic and financial data show that Ghana’s Gross International Reserves have improved, rising from $5.99 billion in March 2024 to $6.59 billion in April. This improvement means that the reserves, which previously covered 2.7 months of imports, now cover three months, meeting the minimal need under the International Monetary Fund’s (IMF) program. This cushion enables the Central Bank to periodically infuse dollars into the currency market, potentially delaying the Cedi’s devaluation.

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