Cedi’s value rising -BoG
By Isaac AIDOO, Accra
Ghana’s foreign exchange market faced some seasonal pressures in February and early March 2024.
However, the local currency continues to recover its value, supported by strong buffers, according to Governor of the Bank of Ghana, Dr. Ernest Addison.
Dr. Addison informed journalists in Accra that the pressures on the cedi mainly stemmed from the strengthening of the US dollar in international markets and payments made for the energy and corporate sectors.
“These pressures have been mitigated somewhat by continued inflows from remittances and mining companies, and from the Domestic Gold Purchase Programme.
“In the year to 20th March 2024, the Ghana cedi recorded a depreciation of 6.8% against the US dollar,” Dr. Addison stated.
He noted that these factors were compounded by delays and uncertainties associated with the second tranche of the cocoa loan inflow and the World Bank’s disbursement of Budget Support.
Dr. Addison, who announced that the Bank’s Monetary Policy Committee had kept the prime rate at 29%, disclosed that the stock of Gross International Reserves (GIR) at the end of December 2023 rose to $5.91 billion, equivalent to 2.7 months of imports cover for goods and services.
Excluding pledged assets and the Ghana Petroleum funds, the reserves at the end of December 2023 stood at $3.67 billion, equivalent to 1.7 months of imports cover.
The provisional Balance of Payments outcome for 2023 showed an overall surplus of $0.46 billion compared to a deficit of $3.41 billion in 2022.
The development, Dr. Addison maintained, was mainly driven by lower income payments, lower outflows from the capital account, and higher remittance inflows.
They were supported by policies including inflows from the gold purchase programme, stepped-up foreign exchange purchases from the mines and oil companies, the first tranche of the IMF-supported programme, higher remittance inflows, and lower outflows from the debt standstill.
“As a result, the current account recorded a surplus of $1.11 billion in 2023, in contrast to a deficit of $1.52 billion in 2022,” the Governor added.
The services account showed a net payment of $3.40 billion, compared to a net payment of $3.46 billion in 2022.
Net income payments in 2023 dropped to $2.08 billion from $4.51 billion in 2022.
Interest payments on public debt reduced sharply by 89.5% to $0.17 billion in 2023 from $1.69 billion in 2022. ‘
At the same time, remittance flows grew by 10.1% to $3.93 billion.
Dr. Addison disclosed that the country’s trade balance in 2023 recorded a surplus which was 7.9% lower than that recorded in 2022.
“Total exports earnings in 2023 amounted to $16.66 billion, some 4.8% lower than 2022, driven largely by lower crude oil exports and to a lesser extent by cocoa and other exports.
Gold exports, in contrast, increased by 15% to $7.60 billion on the back of both volume and price increases.
The total import bill in 2023 was $14.01 billion, dropping by some 4.2% compared to 2022, driven by both oil and non-oil imports.
Oil imports reduced by 3.3% to $4.48 billion – with non-oil imports falling by 4.6% to $9.54 billion,” he disclosed.
