Accra, Ghana – December 19, 2024 – The Ghanaian cedi has hit a new low, selling at GH¢15.95 to the US dollar at forex bureaus across the country. The cedi’s depreciation has been a major concern for economists and business leaders, who warn that the currency’s decline could have far-reaching consequences for the economy.
According to data from the Ghana Forex Association, the cedi has lost over 50% of its value against the dollar in the past year, making it one of the worst-performing currencies in the world. The decline has been attributed to a combination of factors, including a decline in foreign investment, a rise in imports, and a decrease in foreign exchange earnings from exports.
The cedi’s depreciation has had a significant impact on businesses and individuals, who are struggling to cope with the rising cost of imports and the decline in the value of their savings. Many businesses have been forced to increase prices, leading to a rise in inflation, while individuals are seeing their purchasing power decline.
Economists are warning that the cedi’s depreciation could have further consequences, including a rise in interest rates, a decline in economic growth, and a decrease in investor confidence. “The cedi’s decline is a major concern, and it’s not just a matter of the currency’s value,” said Dr. Ernest Addison, a leading economist. “It’s a sign of deeper structural issues in the economy, and it requires a comprehensive solution.”
The government has announced plans to intervene in the foreign exchange market to stabilize the cedi, but economists are skeptical about the effectiveness of these measures. “The government’s efforts to stabilize the cedi are welcome, but they need to address the underlying causes of the depreciation,” said Dr. Addison. “We need to see a comprehensive plan to boost exports, reduce imports, and increase foreign investment.”
The cedi’s decline has also had a significant impact on the country’s trade balance, with imports rising and exports declining. The trade deficit has widened, putting pressure on the cedi and contributing to its decline. To address this issue, the government needs to implement policies to boost exports and reduce imports, such as investing in infrastructure, improving the business environment, and providing support to exporters.
In the short term, the cedi’s depreciation is likely to continue, with many economists predicting that it could reach GH¢20 to the dollar by the end of the year. This would have significant consequences for businesses and individuals, who would see their costs rise and their purchasing power decline. To mitigate these effects, the government needs to take decisive action to stabilize the cedi and address the underlying causes of its decline.
The cedi’s depreciation is also having a significant impact on the country’s inflation rate, which has risen to over 20% in recent months. The rise in inflation is attributed to the increase in the cost of imports, which is driving up prices and reducing the purchasing power of consumers. To address this issue, the government needs to implement policies to reduce inflation, such as increasing interest rates and reducing the money supply.
In conclusion, the cedi’s decline to GH¢15.95 to the dollar at forex bureaus is a major concern, with significant consequences for businesses and individuals. The government needs to take decisive action to stabilize the cedi and address the underlying causes of its decline, including a comprehensive plan to boost exports, reduce imports, and increase foreign investment. The cedi’s depreciation is a sign of deeper structural issues in the economy, and it requires a comprehensive solution to restore stability and confidence.
The cedi’s decline is also a wake-up call for the government to reassess its economic policies and priorities. The government needs to prioritize policies that promote economic growth, reduce inflation, and increase foreign exchange earnings. This includes investing in infrastructure, improving the business environment, and providing support to exporters. By taking decisive action, the government can stabilize the cedi and restore confidence in the economy.
Source: Africa Publicity
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