The Ghanaian Cedi has regained 61% of its value after a 54% drop all year round

The currency regained 61% of its value against major foreign trading currencies, following a 54% drop in value, reported as recently as November.

This sudden development is due to monetary policies enacted by the nation’s Central Bank, including the bank’s decision to restrict foreign exchange support to some essential commodities such as petroleum products, as well as medical and pharmaceutical products.

This sudden swing can also be attributed to Ghana’s plan to reorganize its local debts, initiated by the country’s finance minister, Ken Offori-Atta. Read the story here.

Currently, the average interbank rates used by commercial banks for transactions and published by the Bank of Ghana is at GH¢7.99 (buying) and GH¢8.0 (selling) for one US dollar.

The buying and selling rate of one British pound was GH¢9.72 and GH¢9.73 respectively. For the Euro, the buying and selling rates were GH¢8.48 and GH¢8.49 respectively.

In light of this new development, the Director of Financial Markets at the Bank of Ghana(BoG), Stephen Opata, noted that Ghana’s currency sudden spike could be attributed to the judicious management of liquidity in the financial system.

He stated “We have also seen that Monetary Policy has been tightened, coming on the back of recent increases in the policy rate to 27 per cent. This has also contributed to the cedi’s good run,” he stated.

“The continuous hike in the policy rate will also ensure that excess cedi can be used to purchase government bonds and other securities, despite current concerns with the proposed debt exchange program.” He added.

With the rise in the Cedi’s value, financial experts have now created a conversation around sustainability. It is not enough that the currency has regained its value, Ghanaian authorities have to ensure that the currency remains stable.

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