The Finance Minister, Ken Ofori-Atta, says the cedi has been relatively stable against major trading currencies this year.
He said this when he presented the 2021 mid-year budget review in Parliament on Thursday, July 29, 2021.
“The cedi has been relatively stable in the past four years and maintained its stability even in this pandemic year. For the first time in the Fourth Republic, the exchange rate did not see a spike after an election year,” he said.
The depreciation of the cedi against major trading currencies, especially the dollar, has over the years dominated public discourse.
The local currency had remained fairly stable in the first two quarters of 2021, experiencing a depreciation of less than one percent against the US Dollar between January and June.
Fundamentally, the structure of Ghana’s economy, which is largely import-driven, has been largely blamed for the periodic struggles of the local currency against other currencies.
Foreign investment inflows helped cedi’s stability in the 1st half of 2021 – Economist
Economist, Courage Martey, had also acknowledged the cedi’s performance so far this year.
He attributed this to foreign investment inflows the country has enjoyed in the last few months.
“The cedi actually enjoyed support from foreign investment inflows, especially in the first quarter of this year. We also didn’t experience strong demand from corporate institutions and multinationals, so the cedi found strong support from the supply, which was not absorbed by demand.”
“In the second quarter, we saw a renewed increase in corporate demand. The demand for forex to repatriate this profit actually increased the demand pressure on the market. Due to the Bank of Ghana’s intervention, even though the demand was increasing, we saw it happening in a very controlled space. However, we ended the quarter by overturning all the gains we made in the first quarter so that at the end of the first half of this year, the cedi appears to be relatively stable,” he said in a Citi News interview.