Governor of the Bank of Ghana, Dr. Ernest Addison has revealed that the Ghana Cedi has been on a depreciation spree since the beginning of this year till date.
According to the central bank, the local currency depreciated by 15.6 percent against the US dollar, on the foreign exchange market, 13.1 percent against the Pound Sterling, and 13.6 percent against the Euro, during the first quarter of 2022.
Even though the BoG notes that there have been some moderations in the rate of depreciation from the beginning of April through to the 18th of May 2022, the Cedi currently sells at GH¢8.10 against the US dollar.
Speaking at a press conference after the 106th Monetary Policy Committee meeting held last week, “The Ghana Cedi depreciated by 0.2 percent against the US dollar, but appreciated by 5.7 percent against the Pound Sterling and 5.4 percent against the Euro, bringing the year-to-date depreciation against these currencies to 15.8 percent against the US dollar, 8.2 percent against the Pound Sterling, and 8.9 percent against the Euro.”
Meanwhile, the Bank of Ghana Monetary Policy Committee has reviewed the policy rate by 200 basis points from 17 percent to 19 percent.
The Governor explained that the move is meant to stem the inflation which has been surging in recent months.
The inflation rate for April this year currently stands at 23.6 percent - the highest recorded in 18 years, according to the Ghana Statistical Service.
Explaining the rationale behind the hike in the policy rate, the governor said, "The inflation numbers show that while food inflation has accounted for the increases in inflation over the past year, the recent jump in April shows that relative price increases in the non-food sector is accelerating at a fast pace, which provides information on the extent to which prices are becoming embedded.”
