Cedi’s relative stability against US dollar has been strong – Senior Minister

Senior Minister, Yaw Osafo-Maafo says despite the cedi experiencing some marginal depreciation against the US dollar in the last three years, the cedi’s relative stability since the beginning of this year has rather been strong.

This follows the cedi appreciating against the US dollar by over 6 percent since January this year.

According to him, the policy rate has also witnessed a downward trend from 25 percent to a current 16 percent.

Speaking at the ceremony to commission the newly established noodles factory under the One District Factory (ID1F) initiative of the government in Tema on March 10, he indicated the stability of the local currency has also brought down lending rates to below 25 percent.

Consequently, market updates from the First National Bank revealed there has been a more than 6 percent appreciation of the local currency since the beginning of the year.

From the report, since January 2020 the cedi has appreciated by 6.4 percent against the US dollar – a feat that has never been achieved in recent years.

For example, at the beginning of this year (January), the cedi was trading averagely at GH¢5.534 to US$1. However, as of Thursday, February 20, 2020, it traded averagely at GH¢5.282 to US$1. Meanwhile, in January 2019 alone, the cedi had depreciated close to 3 percent against the dollar, and by 13.4 percent at the end of 2019.

The cedi, according to the South African-based bank, is tipped to perform even better considering the Bank of Ghana’s (BoG’s) new FX auction strategy that seeks to pump some US$240million into the forex market during the first quarter, in addition to government’s planned 7-year bond auctions.