The Ghana cedi lost about 21.7% in value to the US dollar on the interbank forex market as of May 2023, the Bank of Ghana (BoG) has disclosed in its May 2023 Summary of Economic and Financial Data.
This is coming despite a remarkable run by the local currency in the retail market with a year-to-date loss of about 8%, according to Bloomberg.
Bloomberg disclosed that the cedi has become the world’s best performer against the dollar over the past six months. It has advanced 33% since November 2022, the biggest gain among about 150 currencies, reversing some significant losses.
The depreciation of the cedi in January 2023 (20.6%), February 2023 (22.1%), March 2023 (22.1%) and April 2023 (21.7%) were not slightly different from that of May 2023.
The first two months of the year were not encouraging until the cedi stabilise in March 2023 against the dollar. It has since recorded some stability against the major foreign currencies.
For the pound and the euro, the local currency lost 24.6% and 23.4% in value respectively in May 2023.
Presently, the cedi is going for ¢11 against the American greenback on then retail market and ¢10.83 on the interbank market.
Cedi records relative stability since March 2023
Prior to Friday, May 19, 2023, the cedi recorded relative stability to the dollar since late March 2023.
Investors were cautiously optimistic that Ghana would get the IMF deal approval during the second quarter of 2023.
“Immediately on Friday [May 12, 2023], we saw that reflected in the Ghana cedi performance as the local currency gained 1.0% on Friday alone. The gains have continued into this week as the market expects the approval this week, roundly today, as communicated by government officials, Economist Courage Martey, told Joy Business.
“So, in sum, yes. The recent run appreciation of the Ghanaian cedi is due to the latest positive news effect from anticipated IMF programme approval”, he added.
The country has since secured an IMF Executive Board approval for a programme.