According to the Bank of Ghana, the Ghana cedi has depreciated by 21.7% against the US dollar on the interbank forex market as of May 2023. This is indicated in its May 2023 Summary of Economic and Financial Data.
This is coming despite a remarkable run by the local currency in the retail market with a year-to-date loss of about 8%, according to Bloomberg.
Bloomberg reported that the cedi has seen significant gains over the last six months, making it the best performing currency against the U.S. dollar. The cedi has risen by 33% since November 2022, outpacing the rest of the approximately 150 world currencies and reversing prior losses it had experienced.
The depreciation of the cedi in January 2023 (20.6%), February 2023 (22.1%), March 2023 (22.1%) and April 2023 (21.7%) were not slightly different from that of May 2023.
The first two months of 2023 saw the Cedi struggle to maintain its value against the dollar, but it stabilized at the end of March. Since then, it has been relatively stable against other major foreign currencies.
For the pound and the euro, the local currency lost 24.6% and 23.4% in value respectively in May 2023.
Presently, the cedi is going for ¢11 against the American greenback on then retail market and ¢10.83 on the interbank market.
Cedi records relative stability since March 2023
Prior to Friday, May 19, 2023, the cedi recorded relative stability to the dollar since late March 2023.
Investors were cautiously optimistic that Ghana would get the IMF deal approval during the second quarter of 2023.
On Friday, May 12, 2023, the Ghana cedi had a noticeable surge in value, with the currency increasing by 1.0%. This surge was seen as an early indication of what is expected to happen today when government officials confirms the approval. Economist Courage Martey informed Joy Business that the market is anticipating the approval of this week.
“So, in sum, yes. The recent run appreciation of the Ghanaian cedi is due to the latest positive news effect from anticipated IMF programme approval”, he added.
The country has since secured an IMF Executive Board approval for a programme.