Minister of Finance Dr. Mohammed Amin Adam addressed concerns over speculative activities impacting Ghana’s currency, the Cedi, during his recent press briefing in Accra.
He emphasized the need to curb these speculations for the country’s benefit, noting their detrimental effects on the Cedi’s stability.
Dr. Adam expressed confidence in the Cedi’s future stability, particularly after the completion of the domestic debt exchange program.
He highlighted ongoing efforts towards fiscal consolidation and reserve improvements as key factors expected to bolster the Cedi’s strength in the medium term.
Despite recent pressures on the Cedi due to various factors such as heightened demand from corporate entities, contractor payments, and speculation, Dr. Adam pointed out positive trends in the currency’s performance.
He noted a significant reduction in the Cedi’s depreciation against the US Dollar, from 54.2% in November 2022 to 27.8% in December 2023. As of May 20, 2024, the cumulative depreciation stood at 14.2%, a notable improvement compared to the same period in 2023.
Overall, Dr. Adam remains optimistic about the Cedi’s stability moving forward, citing ongoing strategies to address economic challenges and enhance currency resilience.
“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.”
“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.”