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Gov’t strives to tame Cedi fall as it tops Africa worst currency table

Adnan Adams Mohammed

In spite of government’s recourse to address the loose-break of the local currency exchange rate with the international trading currencies, especially the U.S Dollar, the Cedi ranks the worst currency in Africa.

According to a Bloomberg report, the Ghana Cedi depreciated by 18.21 percent against the U.S dollar in the first quarter of 2022.  This places the Cedi as the worst-performing currency in Africa while the Angolan Kwanza is the best-performing currency in Africa as it currency appreciated by 24 percent against the dollar.

 According to the Foreign Exchange Forward Auction, a total of US$350 million would be auctioned to authorised dealers by the central bank in the second quarter. Per the auction calendar, the bank will sell $100 million in April, $150 million in May and another $100 million in June.

“In accordance with the Foreign Exchange Forward Auction Guidelines, bids are invited as per the prescribed format to purchase United States dollars against Ghana cedis, separately on each auction date”, Bank of Ghana has said in a statement that announced the information of all Authorised Foreign Exchange Dealing Banks and the Auction Calendar for Foreign Exchange Auctions for the second quarter of 2022.

Also, the Central bank has cautioned the business community and persons pricing goods and services in foreign currencies to desist from such practices or have themselves to blame as it breaches the Foreign Exchange Act, 2006 (Act 723), which prohibits companies and institutions from pricing, advertising, receipting, or making payments in foreign currencies in Ghana.

The central bank in a statement also said the law prohibits individuals or institutions from engaging in foreign exchange business without a licence issued by the Bank of Ghana.

“Such violations are punishable on summary conviction by a fine of up to seven hundred (700) penalty units or a term of imprisonment of not more than eighteen months(18) or both,” the Bank of Ghana cautioned.

The bank also cautioned the public to desist from “black market” transactions.

The central bank further reiterated in the statement signed by its Secretary, Sandra Thompson, that the only legal tender for transactions in the country is the Ghana Cedi.

“The Public is hereby notified that the sole legal tender in Ghana is the Ghana Cedi. The Bank of Ghana, in collaboration with the National Security and Law Enforcement Agencies, will clamp down on illegal foreign exchange operations. All offenders shall be dealt with in accordance with the law.’

Below is the currency performance table:

CURRENCIES WITH “WORST SPOT RETURNS” AT THE END OF QUARTER 1, 2022

RANKING   CURRENCY YEAR-TO-DATE

16th  New Sudanese pound   -2.08%

17th  Ethiopian Birr      -3.89%

18th  Liberian dollar     -4.94%

19th  Sierra Leone leone      -5.10%

20th  Mauritian rupee   -7.05%

21st  Zambian kwacha -8.02%

22nd Egypt pound       -14.27%

23rd  Ghana cedi -18.21%

CURRENCIES WITH “BEST SPOT RETURNS” AT THE END OF QUARTER 1, 2022

RANKING   CURRENCY YEAR-TO-DATE

1st    Angolan kwanza  24.2%

2nd   South African rand       9.38%

 3rd   Guinean franc     4.40%

4th    Botswana pula      2.59%     

5th    Nigerian naira     1.74%

6th    Kenya shilling      1.59%

7th    Rwanda franc     0.66%

8th Mozambique new metica l0.19%

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