The battle between the dollar and the cedi has gone on indefinitely because the dollar keeps rising while the cedi falls.
The cedi has currently lost more than 50% of its value against the dollar. GhanaWeb examines the path of the cedi from January to August in this article.
Many Ghanaians will attest to the fact that 2022 has not exactly been a good year, particularly when it comes to the performance of Ghana’s economy.
All the macroeconomic indicators seem to be pointing in the wrong direction, with inflation rising to unprecedented levels (currently hovering above 30 percent). As a result, the prices of food, transport, and oil products have particularly become issues of grave concern to many Ghanaians.
The concern is why prices are increasing at unprecedented levels in Ghana. One major reason is the depreciation of the country’s currency, the Ghana Cedi. 2022 has not been a good year for the cedi, with the currency currently losing about 40 percent of its value and being ranked as the second worst performing currency among 150 currencies in the world, according to Bloomberg.
But how did we get to this point? GhanaWeb takes a look the performance of the cedi against one major foreign exchange, the US Dollar (dollar).
Cedi to dollar rate in January 2022
According to data from the Bank of Ghana (BoG), the cedi/dollar rate was GH¢5.9 at the beginning of January 2022. But it depreciated to GH¢6.02 at the inter-bank level, indicating a depreciation of nearly 12 percent.
Cedi to dollar rate in February 2022
As of the end of February 2022, the cedi had once again depreciated against the dollar by about 10 percent, from the GH¢6.02 rate at the end of January 2022 to GH¢6.6, as per data from the BoG.
Cedi to dollar rate in March 2022
For March 2022, the cedi once again depreciated significantly to the dollar from GH¢6.6 to GH¢7.1, showing a month-on-month depreciation of approximately 8 percent.
Cedi to dollar rate in April 2022
At the end of April 2022, the cedi depreciated by less than 1 percent month-on-month, from GH¢7.1122 to GH¢7.1128.
Cedi to dollar rate in May 2022
The cedi to dollar rate at the end of May 2022 was GH¢7.14, which again signifies a less than 1 percent drop from the GH¢7.11 cedi dollar rate recorded at the end of April 2022.
Cedi to dollar rate in June 2022
For June 2022, the cedi depreciated to GH¢7.23 per dollar, which showed a depreciating rate of 1.3 percent compared to the GH¢7.14 exchange rate for May 2022.
Cedi to dollar rate in July 2022
The value of the cedi reduced to GH¢7.61 by the end of July from the GH¢7.23 per dollar it started with for the month. This showed an approximate percentage depreciation of 5 percent.
Cedi to dollar rate in July 2022
On the Interbank forex rates from the BoG on Friday, August 19, 2022, the cedi is trading against the dollar at 8.1031. This shows a month-on-month depreciation rate of about 6.6 percent from the previous month.
Per the figures of the BoG, the cedi-dollar rate was 5.9 at the beginning of 2022; now, it is 8.1. This shows that from January 2022 to today, August 19, 2022, the Ghana Cedi’s value has fallen by approximately 40 percent.
From the figures above, it is clear which currency is winning the cedi and dollar ‘fight’.