The Bank’s affirmation follows the depreciation of the cedi by a marginal 0.25 percentage points against the US dollar only eleven (11) days into the first quarter of 2021.
The cedi on Monday, January 11, 2021, was trading at GHS 5.76 against the US dollar.
The cedi, in the first quarter of every year, usually comes under some pressure due to the high demand for dollars by businesses to finance imports often resulting in a depreciation of the local currency.
To tackle the depreciation of the cedi in the first quarter of the year, the Bank of Ghana (BoG) has allotted close to $60 million per its bi-weekly forex forward auctions for Q1 2021.
In total, the BoG will be selling a total of $300 million in its forex forward auctions in Q1 2021 alone.
Speaking to the media, an economist with DataBank, Courage Martey, noted that the amount of dollars to be sold by the BoG in Q1 2021 alone, is a recognition of the pressure the cedi goes through in the first quarter of every year by the Central Bank.
“The amount of dollars to be sold in the first quarter shows a much bigger amount to be sold in the market for the first quarter compared to what is to be sold in the subsequent quarters and this is a recognition of the pressure the cedi goes through the first quarter. This is twice the amount to be sold in subsequent quarters,” he said.
The cedi, for the whole of 2020 depreciated by 3.9 percent, a depreciation rate performance partly achieved due to a weaker dollar caused by the impacts of the COVID-19 pandemic.