The Governor of the Bank of Ghana (BoG), Dr Ernest Addison has said the outlook for the Ghana cedi has improved.
Speaking at the 108th Monetary Policy Committee (MPC) press briefing in Accra on Thursday (6 October), Addison said this has been “aided by the recent disbursement of the loan from Afreximbank of US$750 million, the signing of the syndicated Cocoa Loan of US$1.13 million, and the agreement with gold and oil companies to purchase the repatriated foreign exchange earnings of about US$83.9 million so far, will help stabilise the exchange rate.”
In the year to September 2022, the Ghana cedi depreciated by 37.5%, 24.1%, and 27.5% against the US dollar, the pound, and Euro, respectively.
In comparison with the same period of last year, the Ghana cedi fared better, depreciating by 1.8% and 0.5% against the US dollar and the pound, respectively, and appreciating by 4.0% against Euro.
According to the Bank of Ghana (BoG), the depreciation of the currency was driven by higher crude oil product import bill on the back of rising prices, non-roll over of maturing bonds by non-resident investors, portfolio reversals and sudden exit of non-resident investors in the bond market, as well as loss of market access to Eurobond resources.
The central bank said the effect of these factors has been exacerbated by the strength of the US dollar, resulting in the depreciation of the local currency from the beginning of the year-to-date.
Inflation
According to the BoG, “Inflation remains elevated and the balance of risks is on the upside. Although the forecasts are for monthly inflation to continue to slow down, the risks are on the upside, emanating largely from pass-through effects of the currency depreciation, the recent upward adjustment in utility tariffs, and rising inflation expectations.”
However, the central bank said it remains committed to re-anchoring inflation expectations and returning to a disinflation path.
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