Ghana: Ghanaian cedi strengthens markedly in July
July 16, 2015
In July, the Ghanaian cedi (GHS) strengthened significantly against the U.S dollar, thus breaking the depreciating trend that began in January of this year. On 13 July, the currency gained almost all of its losses this year and traded at 3.46 GHS per USD. The result was 20.28% stronger than on the same day of the previous month, but still 2.5% weaker on an annual basis. The recent appreciation of the cedi reflects the Central Bank’s decision to intervene in the exchange rate market as well as expectations of increased foreign inflows in the second half of the year.
On 15 July, the Central Bank of Ghana kept its monetary policy rate unchanged at 22.0% as the recent surge of the cedi against the U.S dollar has helped ease pressure on inflation. The Bank has declared that the robust interbank intervention will continue in the future in a bid to support the weak currency. In addition, an increase in foreign inflows as a result of the government selling as much as USD 1.5 billion in Eurobonds by the end of this September as well as the IMF’s aid deal will support the currency in the medium term.
Author: Dirina Mançellari, Senior Economist