Business News of Saturday, 2 January 2021

Source: www.ghanaweb.com

End of 2020: Cedi records 3.9% depreciation to dollar

The 2020 performance of the cedi has been the best so far since 2017 The 2020 performance of the cedi has been the best so far since 2017

The end of 2020 saw the cedi being named as one of the best-performing currencies in Sub Saharan Africa currency after it depreciated about 3.93% to the US dollar.

The 2020 performance of the cedi has been the best so far since 2017 when it depreciated by only 4.88%.

The rate of depreciation recorded at the forex bureau was even lower at 2.2%.

Joy Business reports that the local currency actually appreciated in the final two weeks of December 2020 at the forex bureau, from a depreciation rate of 3.1%.

Analysts have attributed the Bank of Ghana’s Forex Forward Auction and the diversified exports as some of the factors that brought about the cedis impressive performance.

“This sets a favourable entry into 2021. The expectations are for the GHS [cedi] to remain well supported in Q1-2021 [quarter one 2021] by the improved regulatory oversight, enhanced FX [foreign exchange] forward allotments and continued improvements in risk appetite of non-resident investors’, Courage Kingsley Martey, Senior Economic Analyst at Databank said.

Many analysts had earlier forecast that the cedi will end the year with a less than 5% depreciation to the dollar in 2020.

Recent historical performance of the cedi to dollar

2019 12.9%

2018 8.4%

2017 4.9%

2016 9.6%

2015 18.75%