Finance Official: Government Doing Its Part to Rescue Ghanaian Cedi

Kenneth Nana Yaw Ofori-Atta has assured the public that Ghana’s government remains committed to implementing policies essential in resolving the Ghanaian cedi’s depreciation against the official currencies of the African country’s leading trading partners.

Ghana’s Minister for Finance and Economic Planning spoke amid the present time when the West African nation is confirmed to be one of the territories at risk of a deep economic crisis from the flourishing US dollar.

We want to keep our followers properly informed regarding the latest developments about the Ghanaian cedi.

We think sharing this foreign exchange-related news with them is useful, especially if they hold units of Ghana’s official currency and are thinking of exchanging them this week.

Based on the news article posted online by Indian news outlet NDTV.com, Ghana is one of the record numbers of developing nations presently facing difficulties due to the prevailing US dollar, which is at a two-decade high.

The Ghanaian cedi has lost a grip of approximately a quarter of its value this 2022. At the time of writing this foreign exchange report, US$1 is equivalent to 8.10 Ghanaian cedis, per the exchange rate information posted on Xe.com.

Nonetheless, Ofori-Atta remarked that Ghana’s government had so far implemented a 30-percent trim in expenditures as a component of the steps to decrease the fiscal deficit.

He also noted that this policy is geared toward helping diminish the pressures on the exchange rate.

The ongoing Russia-Ukraine armed conflict has substantially impacted the Ghanaian cedi and the West African country’s exchange rate, besides its international trade, agriculture, and construction sectors.

Ghana’s official currency plummeted to a staggering 30.56 percent versus the US dollar in six months, per the July 8, 2022 Nairametrics.com report.

This drop in the Ghanaian cedi happened despite the hawkish stance of the Bank of Ghana – Ghana’s central bank – to stamp out inflation.

Additionally, the foreign currency appeared to be going in the opposite direction as the US dollar index maintains its bullish momentum.

The Bank of Ghana increased its main lending rate by 250 basis points to 17 percent. It signaled a tough position versus the Ghanaian cedi’s weakening.

It also indicated a stringent stance against the increasing prices of commodities like fuel, sugar, and flour. These two factors have hurt investor confidence lately.

Ghana’s foreign-exchange reserves nosedived from US$9.7 billion at the end of last year to US$8.3 billion at the end of last April.

Foreign exchange analysts believe a more robust US dollar, which US interest rate hikes support, would merely accelerate the Ghanaian cedi’s depreciation.

We find it relieving to learn about Mr. Kenneth Nana Yaw Ofori-Atta sharing the measures the Ghanaian government is taking to address the current issue relating to the Ghanaian cedi.

We think the Ghanaian people can count on the assurance that their Minister for Finance and Economic Planning has given.

We gathered that a strengthening US dollar at a two-decade high has crushed the purchasing power of most foreign currencies in the global markets.

Developing nations like Ghana are presently in dire straits, with burned foreign exchange reserves and people fearing potential economic downturns.

We do hope the Ghanaian government, including the country’s central bank, the Bank of Ghana, continues to work hard on helping the Ghanaian cedi combat depreciation as the US dollar continues to forge upward.

In this manner, the repercussions of the socio-economic issues troubling the people of the West African country, such as rampant inflation and the lingering coronavirus or COVID-19 pandemic, will be mitigated.

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