Cedi depreciates by 29.9% to dollar in 2022 compared to 4.1% in 2021 – BoG

In 2022, the Ghana cedi weakened by 29.9 % cumulatively to the US dollar, the Bank of Ghana’s 2022 Annual Report and Financial Statements have said.

According to the report, the cedi depreciated by 4.1% in 2021.

Similarly, it depreciated against the British pound by 21.2 percent in 2022, compared to 3.1 percent in the previous year. Against the euro, the Ghana cedi depreciated by 25.3 percent in 2022, compared to an appreciation of 3.5 percent in 2021.

“The sharp depreciation of the Ghana cedi in 2022 was largely driven by uncertainties about the country’s fiscal outlook, mainly the back of weak sentiments caused by a delay in the approval of key revenue measures in the 2022 budget, multiple downgrades by international rating agencies, portfolio flow reversals, and the lingering effects of the pandemic and the Russia-Ukraine war,” the report noted.

The Bank of Ghana also incurred losses of GH¢60.8 billion mainly due to the domestic debt restructuring programme.

According to the report, the central bank’s holdings of government debt were restructured, whereas non-marketable holdings of Government of Ghana instruments, including long-term stocks, a Covid-19 Bond, and overdrafts, were subjected to a 50 percent haircut.

Bank of Ghana’s other claims (holdings of marketable instruments) were exchanged under similar terms as other financial institutions under the DDEP.

This led to an impairment of GH¢48.40 billion in 2022.

SSD/AE

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