BoG: Cedi Has Improved
The Bank of Ghana (BoG) says the outlook of the Ghana cedi has improved with the disbursement of the US$750 million Afrexim Bank loan to the country.
The Central bank expects it to do better in the coming days with the expected US$1.13 billion syndicated Cocoa Loan and the purchase of repatriated foreign exchange earnings from gold and oil companies.
“The outlook for the Ghana Cedi has improved, aided by the recent disbursement of the loan from Afreximbank of US$750 million, the signing of the syndicated Cocoa Loan of US$1.13 billion, and the agreement with gold and oil companies to purchase the repatriated foreign exchange earnings of about US$83.9 million so far, will help stabilise the exchange rate.”
The BoG reports that from January 2022 to September 2022, the cedi depreciated by 37.5 per cent against the US dollar, 24.1 per cent against the pound, and 27.5 per cent against Euro.
“ In comparison with the same period of last year, the Ghana Cedi fared better, depreciating by 1.8 per cent and 0.5 per cent against the US dollar and the pound, respectively, and appreciated by 4.0 per cent against Euro”.
The depreciation of the currency, the BoG said, was driven by higher crude oil product import bills on the back of rising prices; non-roll over of maturing bonds by non-resident investors, portfolio reversals and sudden exit of non-resident investors in the bond market; as well as loss of market access to Eurobond resources.
“The effect of these factors has been exacerbated by the strength of the US dollar, resulting in depreciation of the local currency from the beginning of the year to date”, the Central bank noted.
The $750 million Afrexim Bank loan hit the account of Ghana on August 29, 2022. The cedi equivalent was given to the government while the central bank kept the dollars to shore up the foreign reserves of the country which had declined to 7.6 billion dollars as of June 2022.
On July 20, 2022, the Parliament of Ghana approved the Afrexim bank facility to finance eleven projects including the Ofankor-Nsawam road; Ejisu-Konongo road, completion of the Nsawan Apedwa road project; Suame Interchange and Local Road Network Project; completion of the Flower Pot Interchange at Legon; Completion of Sofoline Interchange, Construction of Kwabenya-Peduase Road Project, the completion of Eastern Corridor Lots 5 and 6; completion of Enkyikrom-Adawso road project; Purchase of rolling stock and spare parts, and the construction of Stadia for All Africa Games.
Source: opemsuo.com/Hajara Fuseini
