With only four days left to end the year, the Ghana cedi is on the verge of recording one of its strongest performances since 2017.
That will also make it one of the best-performing currencies in Sub-Saharan Africa.
Supported by the covid-19 pandemic which has ravaged global economies and affected global trade, diversified exports, and the Bank of Ghana’s forex forward auction, the local currency has only lost 3.5% in value to the US dollar on the interbank market. It is even less in the retail market.
Senior Economic Analyst at Databank Research, Courage Martey, tells Joy Business there is a general slowdown in market activity as some investors have completed their businesses for the year.
“At the moment, the currency is quite calm, and trading activity [foreign exchange] has slowed down since the conclusion of the December 7 elections”, he pointed out.
He continued saying “there seem to be two reasons why we’ve seen a slowdown in activity on the foreign exchange market; one of them being that with the election out of the way, the policy outlook is clearer now and so the uncertainty and the apprehension that was priced into the foreign exchange market tender, driving save heaven demand for dollars there has been a slowdown in that aspect of activity on the market.”
“Then another factor why the market [foreign exchange] appears to have seen a slowdown in the past week is that we were approaching the Christmas holidays, and so those investors who took positions – some of them are closing their positions – and as we get to the end of the year, some positions have already been closed, and so there is no incentive to engage in any major movement on the market and that explains the slowdown in activity in the foreign exchange market in the past week”, he further said.
The currency expert also said the cedi’s performance this year has been amazing, adding “year-to-date, the cedi has done marvelously well against covid-19 pandemic and this affirms analysts position that the cedi will end the year with a less than 5% depreciation to the dollar this year.”
Recent historical performance of the cedi to dollar