The US dollar is now trading at GH¢17 at some forex bureaus in Accra, despite assurances from the government that there are sufficient foreign reserves to stabilize the cedi. The cedi’s depreciation continued after hitting GH¢16.50 at the beginning of last week and closing the week at GH¢16.80. However, today, the US dollar reached a record high of GH¢17, an all-time high for the currency.
Similarly, the dollar has been rising in the interbank market, trading between GH¢16.28 and GH¢16.36 this week, compared to trading below GH¢16 just 10 days ago. The cedi’s recent depreciation has been attributed to an increased demand for the dollar, as traders prepare for the upcoming festive season and place orders for goods.
Both Finance Minister Dr. Mohammed Amin Adam and Bank of Ghana Governor Dr. Ernest Addison had reassured the public that the cedi would remain stable during the festive period. They emphasized that Ghana’s international reserves were strong enough to meet the growing demand for dollars. However, the situation on the forex market has been markedly different from those assurances.
Ghana’s international reserves had increased from 2.9 months of import cover at the end of May 2024 to 3.4 months by the end of August 2024. Additionally, Ghana is expecting its next disbursement from the International Monetary Fund (IMF) in early December, following a successful staff-level review of the country’s economic programme with the Fund. These inflows are anticipated to help stabilize the cedi, but so far, that has not been the case.
Market analysts had warned earlier that if the Central Bank delayed its intervention, the situation could worsen, especially given that it is an election year. However, the Bank of Ghana’s interventions on the forex market have been minimal, with limited impact on the cedi’s value.
The cedi’s depreciation could have severe consequences for the cost of living, as prices for essential commodities, including fuel, are likely to rise. Food prices, which are already high, could escalate even further, exacerbating the already difficult economic conditions for many Ghanaians.
