Cedi Records Over 20% Depreciation Rates Against Major Currencies

The Cedi has experienced a sharp depreciation against major currencies in September, deepening concerns over the country’s economic stability.

According to the latest Summary of Economic and Financial Data from the Bank of Ghana, the cedi fell by 24.3% against the US dollar, 27.7% against the British pound, and 25% against the euro.

This brings the exchange rates to GHS 15.7 per $1, GHS 20.93 per £1, and GHS 25 per €1.

The figures mark a significant deterioration from the beginning of the year when the cedi had only weakened by 1.3% against the dollar, 1.1% against the pound, and 0.5% against the euro.

The currency’s rapid depreciation underscores the mounting pressure on Ghana’s economy, driven by a combination of external debt burdens, high inflation, and rising import costs.

On a year-on-year basis, the cedi’s depreciation has also worsened, with the latest figures showing a slight increase compared to September 2023.

The cedi had weakened by 22.2% against the dollar, 26.1% against the pound, and 23.4% against the euro a year earlier, indicating a further marginal decline of 2.1%, 1.6%, and 1.6%, respectively.

The currency’s decline reflects the broader challenges facing Ghana, including high public debt, and persistent fiscal imbalances. The Bank of Ghana has been grappling with the task of stabilizing the currency through monetary interventions, but global market conditions, including rising interest rates in developed economies, have made it difficult to reverse the trend.

The depreciation poses significant risks for the country’s import-reliant economy, particularly in terms of inflationary pressures and the cost of servicing external debt, threatening Ghana’s broader economic outlook.

Source:norvanreports.com