Monday, 22 January 2018
Cedi depreciated by 4.45% in 2017

Cedi depreciated by 4.45% in 2017

By Augustine Amoah

THE Ghana Cedi ended the year 2017 with a year-to-date deprecation of about 4.45 percent, according to Ecobank Research.

This was better than 9.2 percent depreciation it recorded in 2016. It traded between GH¢4.41 and GH¢4.42 on the interbank market, but traded at GH¢4.51 on the forex market.
This was largely in line with BMI, research outfit of ratings agency Fitch end-year forecast of GH¢4.52 against the Us dollar.
The local currency did not experience much pressure during the Christmas festivities because the Central Bank injected some dollars into the Ghanaian economy.
Ecobank Research said robust GDP growth of 9 per cent year-on-year in quarter two of 2017 and cumulative trade surplus estimated at 2.5 percent of GDP for January-August 2017 (against a 4.3 percent of GDP deficit in same period in 2016) helped dampen the pace of cedi weakening in 2017.
The local currency hit GH¢4.70 to the US dollar at the forex bureau during the third week of November 2017 but since retreated to about GH¢4.50 afterwards.
It had been supported by strong foreign inflows to debt markets and improved fundamentals with robust GDP growth of 9 percent year-on-year in quarter two 2017 and a cumulative trade surplus estimated at 2.5 percent of GDP for January to August 2017, against a 4.3 percent of GDP deficit in same period in 2016.”
Among West African currencies, the cedi did better than the Liberia dollar (27.4 percent depreciation), Nigeria Naira (12.4 percent depreciation), Sierra Leone Leones (27.0 percent depreciation) and The Gambia Dallasi (10 percent depreciation). However, currencies such as Ivory Coast CFA, Guinea CFA and Cape Verde escudo all appreciated against the American dollar in 2017.
South African rand, Namibia dollar and Lesotho loti remained relatively unchanged in value against the World’s most important currency this year.
The Central Bank had said in its last Monetary Policy Committee report that foreign exchange market conditions remain relatively stable supported by improved liquidity conditions, despite some marginal demand pressures. It added that from January 2017 to August 2017, the Ghana cedi depreciated by 4.5 percent against the US dollar, compared with a depreciation of 3.9 percent in the same period of 2016.But it appears the cedi witnessed some improvement in the month of September 2017.

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