Tag Archives: Ghana Cedi

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Bloomberg names Ghana Cedi as world’s best performing currency

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The Ghana cedi has been named the world’s best-performing currency this month, after appreciating nearly 16 per cent against the US dollar since the start of April 2025 per Bloomberg.

The currency’s rally has helped ease inflationary pressures, contributing to Ghana’s lowest inflation rate in eight months. As of today, the cedi is trading at GH₵13.4 against the dollar.

Consumer price inflation fell to 21.2 per cent in April, down from 22.4 per cent in March, Government Statistician Alhassan Iddrisu announced in Accra on Wednesday. Monthly price increases slowed to 0.8 per cent, driven largely by falling import costs due to the cedi’s strength.

Non-food inflation dropped to 17.9 per cent from 18.7 per cent, while food inflation also eased, declining to 25 per cent from 26.5 per cent. “A rally in the cedi reduced the cost of imports,” Iddrisu confirmed, crediting the currency’s appreciation with driving much of the recent inflation relief.

Bloomberg data showed that since the beginning of April, the cedi has outpaced all global currencies in terms of gains against the US dollar, bolstering consumer confidence and easing pressure on the cost of imported goods.

Despite this progress, analysts say it’s unlikely that the Bank of Ghana will rush to lower interest rates at its upcoming policy meeting. “It tightened at its last meeting to mop up any excess liquidity,” said Dr. Agyapomaa Gyeke-Dako, an economist and senior lecturer at the University of Ghana Business School. “So now the central bank action going forward may not readily reduce the monetary policy rate yet because there might still be some threats to inflation coming from the hikes in utility prices.”

The Monetary Policy Committee (MPC) had surprised markets in March with a 100 basis-point hike, raising the key rate to 28% as part of efforts to stabilise prices. The central bank has indicated it will continue to assess inflation trends before easing its stance.

“Easier monetary conditions could rekindle inflationary pressures,” warned Mark Bohlund, senior credit analyst at REDD Intelligence, cautioning that the Bank of Ghana may hold off on any near-term rate cuts.

However, there is cautious optimism for rate relief later in the year if disinflation continues. “As the monetary authority sees the next readings of inflation and we see declines, the committee will reassess the scope for a gradual easing in the policy stance,” Governor Johnson Asiama said following the March meeting.

Inflation in Ghana has remained above the central bank’s target band of 6 per cent to 10 per cent since September 2021, following a debt crisis that triggered a sharp depreciation in the cedi and sent import costs soaring. The MPC forecasts inflation could fall to around 16% by the end of 2025, and gradually return to the target range by the second quarter of 2026.

The International Monetary Fund (IMF), which is working closely with Ghana under a support programme, also expressed optimism. “It makes us very confident that inflation is going to go down in the next few months toward the program objectives,” said Stéphane Roudet, IMF Mission Chief to Ghana, during a recent briefing in Washington.

As the West African nation continues efforts to restore economic stability, the resurgence of the cedi has emerged as a bright spot—both a symbol and a tool of recovery.

 

Source: Graphic.com.gh

 

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Cedi among 4 worst performing currencies in Sub Saharan Africa in 2024 – World Bank

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The World Bank’s October 2024 Africa Pulse Report has revealed that the Ghana cedi and three other currencies are the worst-performing currencies in Sub-Saharan Africa (SSA) in 2024.

The report indicates that the cedi has lost about 24% value to the US dollar, placing it as the 4th weakest in SSA.

South Sudan’s pound (over 60%), Ethiopia’s birr (51%) and Nigeria’s naira (over 40%) are the worst-performing currencies in Sub-Saharan Africa in 2024.

Interestingly, the Kenya shilling is the best-performing currency in Africa this year with a year-to-date gain of about 21% as of August 2024.

“Ethiopia, Ghana, and Nigeria are among the worst performing in Africa this year, and their currencies continue weakening while demand for foreign exchange remains pressing”, the report said.

It added “By end-August 2024, the Ethiopian birr, Nigerian naira, and South Sudanese pound were among the worst performers in the region. The Nigerian naira continued losing value, with a year-to-date depreciation of about 43% as of the end of August. Surges in demand for US dollars in the parallel market, driven by financial institutions, money managers, and non-financial end-users, combined with limited dollar inflows and slow foreign exchange disbursements to currency exchange bureaus by the central bank explain the weakening of the naira”.

In contrast, the report said some currencies that weakened in 2023 have stabilised or strengthened this year.

“The Kenyan shilling is the best-performing currency in Sub-Saharan Africa this year: it appreciated by 21 per cent year-to-date by end-August 2024. The South African rand and currencies pegged to it have strengthened by 3.1% so far this year, after losing value in the past year”.

Although most currencies are stabilising, the October 2024 Africa Pulse Report pointed out that the exchange rate pressures and shortages of foreign exchange remain a concern for African policymakers.

“From a sample of 30 countries and two currency unions (the Economic and Monetary Community of Central Africa and WAEMU), more than one-third of the countries in the region are set to have less than three months of imports in international reserves by end-2024”.

Source: Joy Business

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Cedi has performed better under NPP govt – Bawumia

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Dr. Mahamudu Bawumia, the Flagbearer of the New Patriotic Party (NPP), has asserted that the current value of the Cedi against the Dollar represents an improvement compared to its value during the tenure of the NDC government.

In an interview with AfricaWatch, Dr. Bawumia emphasized that the Cedi has performed relatively well under the Akufo-Addo administration, reiterating his previous claims about the currency’s stability.

He noted that despite the current global economic challenges, the depreciation of the Cedi has been sustainable, contrasting with the situation under the NDC administration.

“Why not? We use averages to measure progress in statistics and economics all the time. It is a valid comparison of the management of the exchange rate under our government versus under the NDC government. The point is that notwithstanding the major global and domestic challenges we have been through, it is remarkable that whereas the exchange-rate depreciation between 2009-2016 averaged 13.9%, between 2017-2023 it averaged 13.1%. That is a fact,” Dr Bawumia stated.

“The data shows that from 2009-2016, the cedi depreciated cumulatively by 71.1%, and between 2017 and 2023, the cumulative depreciation was 64.6%. So, whether you look at the average or the cumulative, the depreciation of the cedi has been lower under our government, notwithstanding the severe global shocks we have endured. That is the basic truth.”

Dr. Bawumia also defended a statement he made during the NPP’s campaign in 2016, validating his comment of an exchange rate exposing a government, when its fundamentals are weak.

He attributed the current exchange rate of the country, to global crises of the Russia-Ukraine war and the 2019 COVID pandemic, among others.

“Absolutely! It is still true, and I will continue to stand by that statement. We saw that between 2017 and 2021 when the fundamentals in terms of the fiscal deficit, inflation, GDP growth, external balances, and international reserves were fairly strong, the exchange rate was relatively stable.

“But following the COVID-19 pandemic, the Russia-Ukraine war, the banking-sector crisis, the excess-capacity energy payments, and the lack of access to international capital markets, the fundamentals of the economy were weakened, and the fiscal deficit and debt levels increased.

“Inflation reached some 53% at the end of 2022 and you saw the exchange rate depreciate by some 30% in 2022. The fundamentals have strengthened recently, with the declining fiscal deficit, declining inflation, improved external reserves, and so on, and this has resulted in relative stability of the exchange rate. So, my statement still holds true.”

Source: Myxyzonline.com