Cedi among top 10 performing currencies in Africa despite Covid-19 pandemic

The cedi has ended the third quarter of this year with a relative strong performance, depreciating by only 2.97 percent against the dollar.

It positioned it among the top 10 performing currencies on the African continent this year, amid covid-19. 

In West Africa, the cedi is second to the CFA Franc in terms of performance, fourth in Sub Saharan Africa and eighth on the continent. It could be on the path of registering one of its strongest performance since 2017.

The local currency’s relative strong performance has been largely attributed to the Bank of Ghana’s intervention on the forex market and diversified exports.

This comes despite lower participation of foreign investors in recent government of Ghana bonds auctioning.

With the first tranche of the expected $1.3 billion cocoa syndication loan hitting the Bank of Ghana account by next week, the nation’s international reserves may exceed $10 billion.

That will be enough to cushion the cedi against any unexpected volatility in the last three months of this year.

For the remainder of the year, analysts expect the cedi to continue the path of its relative stability.

This is because of the bi-weekly foreign exchange auctions which has improved forward trading and reduced speculative trading as well as panic buying on the spot market.

The expected inflows from part of the COCOBOD syndication loan is also going to play a vital role in preserving the local currency performance at least for the next three months.

Recent performance

Last year, the cedi recorded a rate of depreciation of 12.9 percent as compared to rate of depreciations of 8.4 and 4.9 percent in 2018 and 2017 respectively.

Source: Joy Business

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