Bank of Ghana Reports Significant Gains for the Cedi
The Bank of Ghana says the local currency, the cedi, has gotten stronger recently because of improvements in the country’s trade and finances. They explained that the external sector has done well this year, thanks to higher earnings from gold and crude oil exports and more money sent home by Ghanaians living abroad. These factors have helped the country save more foreign money.
Between January and September 2024, the current account surplus (the difference between money coming in and going out from trade and other earnings) grew to $2.2 billion, compared to $912 million in the same period in 2023. Also, less money was sent out of the country this year—$414 million compared to $1.4 billion last year.
Together, this led to a better balance of payments (the summary of a country’s transactions with the rest of the world) and helped Ghana’s reserves grow by $1.91 billion, reaching $7.83 billion by the end of September 2024. By November 22, reserves went up further to $7.92 billion, enough to cover 3.5 months of imports.
The Bank noted that this stronger performance has improved confidence in the foreign exchange market. From October to November 2024, the cedi appreciated (gained value) by 6% against the US dollar, 7.6% against the British pound, and 9.1% against the euro. Despite this, the cedi has still lost 22.7% of its value against the dollar, 22.4% against the pound, and 19.1% against the euro so far this year.