The Governor of the Bank of Ghana (BoG), Dr Ernest Addison has actually attributed the depreciation of the Ghana cedi to resources flight as well as the worldwide financial impact of the COVID-19 pandemic.
In a real-time interview with Graphic Business on Facebook, Dr Addison said the Ghana cedi has decreased by less than two percent in 2020.
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He described that the worth of the Ghana cedi shows numerous factors, including the domestic economy and also developments in the international economy.
Dr Addison was responding to the question: “Why is the cedi still falling when we have less imports and forex-based transactions?”
He said: “The cedi reflects many factors, It reflects our domestic economy. It reflects developments in the global economy and If you look at what has happened worldwide, we have seen capital leave jurisdictions such as ours into the advanced economies.
“Now, when that happens, it has an impact on the availability of dollars in Ghana and that can trigger a depreciation of the currency. Now, if you look at this year 2020, we started the year on a very strong note, with very strong reserves and then also we went very early to the capital markets to issue a three million dollar bond. So, by January and February, the cedi was appreciating. If you look at the data very carefully, the Ghana cedi appreciated for nearly two months of 2020 until the global shock came in terms of this COVID pandemic and then we saw capital flowing out of countries like ours and therefore the cedi also started losing value.
“And therefore if you look at the year-to-date statistics you will see that the cedi this year has depreciated by less than 2 per cent because there has been quite a significant appreciation of the currency in the first two months of the year.”
