The Ghana cedi ended last year with a depreciation rate of 3.93% to the US dollar, making it one of the best-performing currencies in Sub Saharan Africa.
The impressive performance also makes it the best since 2017 when it depreciated by only 4.88%.
At the forex bureau, the rate of depreciation was even lower at 2.2%.
Joy Business learnt the local currency actually appreciated in the final two-weeks of December 2020 at the forex bureau, from a depreciation rate of 3.1%.
Analysts believe that the cedi has benefited from a myriad of factors including the Bank of Ghana’s Forex Forward Auction and the diversified exports.
“This sets a favourable entry into 2021. The expectations are for the GHS [cedi] to remain well supported in Q1-2021 [quarter one 2021] by the improved regulatory oversight, enhanced FX [foreign exchange] forward allotments and continued improvements in risk appetite of non-resident investors’, Courage Kingsley Martey, Senior Economic Analyst at Databank said.
Many analysts had earlier forecast that the cedi will end the year with a less than 5% depreciation to the dollar in 2020.
A stable local currency going forward into the year will help businesses to plan well vis-a-vis their budgeting.
Recent historical performance of the cedi to dollar