The Ghana cedi ended last year with a depreciation rate of 3.93% to the US dollar, making it one of the best performing currencies in Sub Saharan Africa.
The impressive performance also makes it the best since 2017 when it depreciated by only 4.88%.
At the forex bureau, the rate of depreciation was even lower at 2.2%.
Joy Business learnt the local currency actually appreciated in the final two-weeks of December 2020 at the forex bureau, from a depreciation rate of 3.1%.
Analysts believe that the cedi has benefited from a myriad of factors including the Bank of Ghana’s Forex Forward Auction and the diversified exports.
“This sets a favourable entry into 2021. The expectations are for the GHS [cedi] to remain well supported in Q1-2021 [quarter one 2021] by the improved regulatory oversight, enhanced FX [foreign exchange] forward allotments and continued improvements in risk appetite of non-resident investors’, Courage Kingsley Martey, Senior Economic Analyst at Databank said.
Many analysts had earlier forecast that the cedi will end the year with a less than 5% depreciation to the dollar in 2020.
A stable local currency going forward into the year will help businesses to plan well vis-a-vis their budgeting.
Recent historical performance of the cedi to dollar
Source: Joy Business