Finance Minister, Dr. Mohammed Amin Adam has indicated that the depreciation of the Cedi has been considerably stabilized from November 2022 to December 2023 and is showing signs of modest appreciation against the Dollar in 2024.
During his monthly economic briefing, the minister highlighted that the exchange rate has seen significant stabilization, with the depreciation of the Cedi against the US Dollar reducing by half from 54.2% at the end of November 2022 to 27.8% at the end of December 2023.
He also mentioned that the Cedi is expected to strengthen in the medium term following the completion of the domestic debt exchange program.
“But for recent pressures we are seeing on exchange rate movements, the exchange rate has been largely stabilised with the depreciation of the cedi against the US Dollar halving from 54.2% at the end of Nov 2022 to 27.8% at the end of Dec 2023.
“The Cedi’s stability has continued into 2024, with a cumulative depreciation of 14.2% as of 20th May 2024, compared to 20.7% recorded in the same period in 2023. We expect the cedi’s stability to improve into the medium-term as we complete debt restructuring, make more progress on fiscal consolidation, and improve our reserves over the medium-term.”
He further addressed the current pressures in the Cedi which he attributed to the “strengthening of the US Dollar against major trading currencies”
“The recent pressures we are observing on the cedi is largely on the back of the strengthening of the US Dollar against major trading currencies, seasonal forex demand including elevated demand from corporate institutions, payment to contractors and to IPPs, high Cedi liquidity and speculation.”
The Finance Minister outlined several measures, including enhancing revenue mobilization and securing World Bank loans, among others, that the government is undertaking to strengthen the Cedi against major trading currencies.
The depreciation of the Cedi has prompted calls from various trade groups, including GUTA and Organized Labour, for urgent measures to address the decline.