The Ghanaian Cedi (GH¢) depreciated slightly against the U.S. Dollar (US$) and some major currencies in the foreign exchange market in the month of August, 2021.
According to official data from the Bank of Ghana, the Cedi was very volatile from the beginning of the month of August but stabilizes mid way through the month as the Bank of Ghana increased its foreign exchange supply significantly through the forward auction rates and other prudent policy measures.
The monthly average of one unit of the US Dollar to the Cedi for the month of July, 2021 stood at GH¢5.7848. The Cedi slightly lost ground to the Dollar in August to trade at GH¢5.8264. This represents a depreciation of 0.72 per cent.
Moreover, the British Pounds also followed similar route as the Cedi depreciated against the Pounds Sterling (£) by 0.54 per cent. A one unit of the Pounds Sterling ended the month of July at GH¢7.9926 to. It however, ended the month of August on a higher side at GH¢8.0355.
Similarly, the Euro also held the Cedi to ransom as the Cedi shed GH¢0.0128 of its value. On the average, a unit of the Euro to the Cedi stood at GH¢6.8414 for the month of July. It then rose to GH¢6.8542 in the month of August, representing 0.19 per cent depreciation rate.
Daily Interbank Rates
As at today, September, 2, 2021 at 2:00 pm, a unit of the US Dollar was selling at GH¢6.0016, losing GH¢0.1475 to the Dollar. By close of trading session yesterday, September 1, the rate was slightly lower. A unit of the American ‘greenback’ was buying at GH¢5.8483 and selling at GH¢5.8541
Furthermore, the British Pounds depreciated by 2.78 per cent since yesterday. The Pound Sterling is selling at GH¢8.2984. Meanwhile, by close of yesterday, it was selling at GH¢8.0740.
In addition, a unit of the Euro as at the time of filling this report is selling at GH¢7.1214. Meanwhile, the Canadian Dollar is also selling GH¢4.7723.
Depreciation of the Cedi in the First Half-year
The Ghanaian cedi has so far for the first half-year lost a paltry 0.6% to the US dollar, data from the Bank of Ghana indicate. The Ghanaian local currency has shown impressive run since the beginning of the year until now.
According to the Bank of Ghana, the average exchange rate for the Dollar to the Cedi in January was GH¢5.7608 and that of February was GH¢.7575, gaining 0.06 per cent.
Additionally, the cedi recorded 0.5% gain in April 2021, same as March 2021 and 0.2% appreciation in May 2021. In June 2021, it registered no change in value to the American ‘greenback’ but aggregate, lost 0.6% in value to the world’s most important currency.
However, the repatriation of dividend by some multinationals, beginning June has put some pressures on the cedi.
This has increased demand for the forex though the Central Bank regularly provided dollars to the market to slow down depreciation through the Forex Forward Auction.
Meanwhile, at this point, the Ghanaian Cedi is holding on to a short-term bearish trend against the US Dollar while the longer-term trend does retain some element of mild bullishness, judging from the rate for the first half of the year which stood at 0.6 per cent.
Arguably, this level of depreciation contributes to a rise in consumer price inflation which currently stands at 9%.
However, according to projection by economic and finance think tank, Center for Economics Finance and Inequality Studies CEFIS’ Cedi Outlook Report, the Ghanaian Cedi will hit GH¢6.45 by the end of this year, 2021.
This will further compound the woes of the economy as importers will have to use extra Cedi to do their usual transactions. They will also have no other option than to push the burden on to the consumer which will worsen their already hellish conditions.
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