A report from the GoldStreet Business has revealed that although the cedi is still depreciating, it is doing so very slowly, as assessed in year-to-date terms.
As at June 29, data from the Bank of Ghana’s interbank exchange market revealed that the local currency recorded its worst half-year performance since 2015.
By the close of trading activities on Friday, September 27, 2019, the cedi had depreciated further from its former position during the half-year period.
The cedi has currently depreciated against the US dollar by 9.34 percent, year-to-date, as it was trading at GHc 5.32 to US$ 1 by the end of last week.
The sharp fall of the cedi during the early part of the year was cushioned when the central bank boosted its foreign reserves through the government issuance of a $3 billion Eurobond as well as the enforcement of a number of forex directives.
Some analysts in the international treasury market insist that the central bank has been able to manage to Eurobond very well, which has led to a fairly stable forex market over the past few months, unlike the situation in the first quarter of the year.
Notwithstanding the steady decline of the cedi, the central bank is still seeking to hold further depreciation at bay, with the introduction of some measures, such as the yet to be implemented foreign exchange forward rate auction limited to 7-day, 15-day, 30-day, 45-day, 60-day and 75-day tenors on October 1, 2019.
The auction will allow banks, on behalf of their clients to lock into exchange rates now for delivery of forex later in the year.
This will expectedly curb the activities of currency speculators who otherwise would store up forex in the hope of selling it at significantly higher exchange rates towards the end of the year in order to make a tidy profit.
The central bank has also warned individuals and institutions against the pricing, advertising and receipt or payment for goods and services in foreign currencies.
It said the increase in deposits of foreign currency partly contributed to the constant depreciation of the cedi in the first quarter of the year.