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The Ghanaian cedi has depreciated by 21.5% against the US dollar as of August 25, 2024, according to the Minister for Finance, Dr. Mohammed Amin Adam. This development comes despite efforts to stabilize the currency through various economic measures.
During a press engagement on Thursday, August 29, 2024, Dr. Amin Adam provided an update on the cedi’s performance and other key economic indicators. He highlighted that although the cedi has experienced depreciation, there have been improvements compared to previous years.
For instance, the depreciation rate moderated to 27.8% in December 2023, down from 54% in November 2022. Additionally, Cedi’s depreciation rate in the first quarter of 2024 was 7.7%, significantly lower than the 22.1% recorded in the same period of 2023.
“The cedi cumulatively depreciated by 18.6% against the US dollar at the end of June 2024, compared to 22% in the same period in 2023,” Dr. Amin Adam explained.
He further noted that the month-on-month depreciation rate showed signs of improvement, decreasing from 6.1% in May 2024 to 3.1% in June 2024, and further to 2.1% in July 2024.
“If this trend continues, I can assure you that our cedi will continue to hold against the major currencies,” he added.
The Finance Minister attributed the Cedi’s relative stability to several factors, including the Bank of Ghana’s monetary policies, strong fiscal consolidation, the Gold for Oil programme, and the Bank of Ghana’s Gold for Reserves initiative.
Other contributing measures include the centralised platform for foreign exchange bureaus, implementation of the dynamic cash reserve ratio to absorb excess liquidity, revised regulations on advanced payments of imports, and positive market sentiments following the disbursement of the third tranche of the IMF extended credit facility.
In addition to Cedi’s performance, Dr Amin Adam also discussed the country’s inflation trends, particularly about imported goods. Imported inflation, which refers to the increase in prices of goods and services brought into the country due to factors such as exchange rates and global market conditions, declined by 1.9 percentage points to 15.6% in July 2024, down from 17.5% in June 2024.
This reduction in imported inflation contributed to the overall decline in Ghana’s inflation rate, which dropped to 20.9% in July from 22.8% in June 2024.
The Finance Minister noted that the decline in food and non-food prices played a significant role in the overall inflation decrease. Food inflation fell by 2.5 percentage points to 21.5% in July, while non-food inflation declined by 1.1 percentage points to 20.5% during the same period.
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