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Tag: cedi depreciation

  • Policy Rate held at 14% … amid rising global energy pressures and robust domestic growth

    Policy Rate held at 14% … amid rising global energy pressures and robust domestic growth

    By Adnan Adams Mohammed 

     

    The Monetary Policy Committee (MPC) of the Bank of Ghana has unanimously voted to maintain the Monetary Policy Rate at 14.0%, citing the need to safeguard price stability while navigating heightened global uncertainty caused by renewed geopolitical conflicts in the Middle East.

    The decision was announced following the committee’s 131st regular meeting, held from July 20 to 22, 2026, where members reviewed global and domestic macroeconomic developments and evaluated risks to the country’s inflation and growth outlook.

    Addressing journalists during the policy announcement, the central bank highlighted that renewed conflict in the Middle East has reignited volatility across global energy markets, leading to supply chain disruptions and a rebound in crude oil prices above $85 per barrel.

    “The easing of geopolitical tensions around mid-June proved short-lived. The renewed escalation of the conflict has led to another closure of the Strait of Hormuz and triggered instability in energy markets,” the MPC statement revealed. “Disinflation trends in several countries have stalled as energy prices have risen sharply, prompting many central banks to pause their monetary policy easing cycles in response to emerging inflationary risks.”

     

    Despite these headwinds, global economic activity has shown resilience, supported by substantial investments in artificial intelligence within the United States and China, leading the International Monetary Fund (IMF) to project global growth at 3.0% for July 2026.

    Strong Real Sector Growth and Credit Expansion

    On the domestic front, the central bank painted a picture of robust economic momentum, driven by strong growth in the services and industry sectors. Real GDP expanded by 6.4% in the first quarter of 2026, up from 6.2% recorded in the corresponding quarter of 2025.

    Furthermore, the Bank’s Composite Index of Economic Activity (CIEA) recorded a year-on-year growth of 13.4% in May 2026, compared to 4.4% in May 2025. This expansion was further bolstered by significant easing in credit conditions across the banking sector. The benchmark 91-day Treasury bill yield dropped to 5.3% in June 2026 from 14.7% a year earlier, while average commercial bank lending rates fell to 15.6% from 27.0%.

    In response to cheaper borrowing costs, private sector credit growth expanded sharply by 41.2% year-on-year in June 2026 (34.1% in real terms), compared to 8.6% recorded in June 2025.

    “The latest confidence surveys conducted in June 2026 showed positive consumer and business sentiments, supported by optimism about growth prospects, subdued inflation, and declining lending rates,” the committee noted.

     

    Inflation Uptick Driven by Base Effects and Transport Costs

    Headline inflation saw a moderate uptick, rising to 5.3% in June 2026 from 3.7% in May 2026, driven by higher food (3.9%) and non-food (6.3%) prices following temporary hikes in transport fares and base effects. However, the MPC emphasized that inflation remains well below the lower bound of the central bank’s medium-term target band (8\% \pm 2\%).

    “The July forecast remains broadly unchanged from the previous MPC round, with headline inflation projected to rise gradually into the target band,” the MPC stated. “Potential upward adjustment in utility tariffs, together with escalating geopolitical tensions in the Middle East and the associated increase in crude oil prices, present upside risks to the inflation outlook.”

     

    Robust External Sector and Banking Solvency

    Ghana’s external position remained firm, supported by high export earnings from cocoa and gold. The trade surplus widened significantly to $8.8 billion in the first half of 2026, up from $5.8 billion in the same period in 2025, while the current account surplus rose to $5.1 billion.

    Gross International Reserves stood at $12.9 billion at the end of June 2026 equivalent to 5.0 months of import cover providing an adequate buffer against external shocks despite higher energy import costs. On the currency market, the Ghana Cedi experienced a year-to-date depreciation of 9.5% against the US dollar as of July 17, 2026, after facing demand pressures in May.

    The banking sector also demonstrated strength, with total industry assets expanding by 30.7% to GH¢502.4 billion, while the Capital Adequacy Ratio (CAR) doubled to 20.4% from 10.6% in June 2025. Non-performing loans (NPLs) improved, declining to 16.1% from 23.1% over the same period.

    Unanimous Stance to Hold Rate

    In concluding its deliberations, the committee determined that maintaining the policy rate at 14.0% balances the need to anchor inflation expectations while supporting ongoing recovery in the real sector.

    “Given these considerations, the committee, by a unanimous decision, maintained the monetary policy rate at 14.0%,” the central bank announced. “The committee judged that the current policy stance remains appropriate to guide inflation into the medium-term target band while allowing time to assess the evolving geopolitical developments and their potential impact on the domestic economy.”

     

    The next regular meeting of the Monetary Policy Committee is scheduled for September 22 to 24, 2026, where the central bank will re-evaluate its stance based on new economic data.

     

  • Cedi’s Rollercoaster: From Africa’s 2025 champion to a shaky 2026 start

    Cedi’s Rollercoaster: From Africa’s 2025 champion to a shaky 2026 start

    By Adnan Adams Mohammed

    Two days ago, the nation was celebrating a historic milestone of the Ghana Cedi as the International Monetary Fund (IMF) officially crowned the Cedi as Africa’s best-performing currency for 2025. Yet, as the sun rises in late January 2026, the local currency has ‘shoved its feet off the rocks’ as it succumbed to market volatility.

    According to a full-year review by the IMF, the Cedi defied early-year skepticism to appreciate by more than 40% against the US Dollar in 2025. This performance placed it at the summit of more than 20 major African economies, surpassing earlier conservative estimates by global financial firms.

    The “Cedi Miracle” of 2025 wasn’t accidental. Market watchers point to a “perfect storm” of disciplined interventions:

    ● Massive Reserve Building: The Bank of Ghana (BoG) fortified its defenses with international reserves totaling nearly $14 billion.

    ● IMF-Supported Reforms: Strict adherence to structural benchmarks under the IMF programme restored investor confidence.

    ● The May Pivot: After a shaky first quarter in 2025, the currency staged a massive recovery in May, gaining 43% in that month alone a momentum it managed to carry through the end of the year.

    The January Blues: A 4% Slip

    Despite the accolades of 2025, the dawn of 2026 has brought a reality check. Data from the BoG’s January Summary of Economic and Financial Data reveals that the Cedi has lost 4.0% of its value against the “greenback” in the first 27 days of this year.

    Currently, the interbank rate sits at GH¢10.88, up from the December close of GH¢10.45. On the retail market where most citizens and small businesses feel the pinch the rate has touched the GH¢12.00 mark.

    Currency   Interbank Rate (Jan 2026) MonthlyDepreciation

    US Dollar ($) GH¢10.88 4.0%

    GB Pound (£) GH¢14.77 4.9%

    Euro (€) GH¢12.80 4.1%

    Mixed Signals and the Path Ahead

    Is this the start of a downward spiral or merely a seasonal “hiccup”? The current market signals are mixed. While the interbank market shows slight losses due to renewed corporate demand for foreign exchange, the retail market has actually shown signs of strengthening in the last 48 hours, with some rates cooling from GH¢12.15 back to GH¢11.90.

    Databank Research remains optimistic, forecasting a rebound in the coming weeks. They cite two major factors: Anticipated BoG Injections: The central bank is expected to use its $14 billion “war chest” to temper bearish expectations.

    Global Shifts: A “dovish” US Federal Reserve and a global trend of sovereigns trimming US Treasury holdings could weaken the dollar globally, providing a “tailwinds” effect for the Cedi.

    “We are eyeing a GH¢10.70/US dollar base case,” notes Databank, suggesting that the current dip might be a strategic entry point rather than a cause for panic.

    Ghana enters 2026 with a prestigious title from the IMF, but the title alone will not pay for imports. As the Bank of Ghana prepares to roll out additional policy measures this year, the focus remains on consolidation. For the average Ghanaian, the hope is that the 2025 champion finds its footing before the “January blues” turn into a year-long headache.

     

     

     

  • Cedi falls 18.5% from exchange rate low

    Cedi falls 18.5% from exchange rate low

    After a strong appreciation to peak reach around GHC10.02 to US$1.0 averagely, the Ghana cedi has broken the chain to run loose since August this year to sell at GH¢13.10 at Forex Bureaus, translating into a depreciation of 18.51 percent over less than the six weeks up to Tuesday, September 9, 2025.

    Many analysts have attributed the sharp fall to strong corporate demand and tight foreign exchange supply as the Bank of Ghana has moderated its forex liquidity injections on the foreign exchange market with supply lower than in May, June and July 2025 after the International Monetary Fund caution in previous month against excessive government intervention on the foreign exchange market.

    Market trend indicates that liquidity has been tight on the foreign exchange market as the market continues to correct itself. As of Friday, September 5, 2025, the local currency was going for c12.90 on average at the forex bureau but has since surged to GH¢13.10. However, analysts have warned this trend may continue if the forex supply is not increased.

    Instructively, Fitch Solutions had earlier revised its end-of-year forecast of the cedi-to-dollar at GH¢13.0, from its previous projection of GH¢15.5 to US$1.0, predicting a 12.9% appreciation against the US dollar in 2025.

    Consequently, President John D. Mahama has assured businesses and investors of greater currency stability, stressing that the government’s focus on fiscal discipline, prudent expenditure management and stronger macroeconomic fundamentals will provide a more predictable environment for trade and investment.

    “I believe that it is about stopping rapid depreciation of the currency. When you have steep depreciation of about like we had in 2024, 25% depreciation in the currency in the first half of the year, it makes planning difficult. And so yes, Bank of Ghana BoG has been intervening in the forex market, but they’ve withdrawn,” he said during his maiden Media Encounter last week.

    “The Cedi is making an adjustment, and I believe that it will settle at a certain rate, and we’ll make sure that any depreciation that occurs in the value of the Cedi is within a margin of about 5% per annum,” President Mahama added.

    The Cedi saw a sharp appreciation against major international currencies earlier this year but has slowed in recent weeks sparking fears over a reversal of the gains made.

    President Mahama projected that the cedi depreciation will remain moderate in the coming months, staying within a band of around 5% per annum, describing the recent currency fluctuations as part of a natural adjustment process rather than a sign of renewed instability, confirming that, the Bank of Ghana (BoG) has ceased interventions in the foreign exchange market.

    Meanwhile, the Vice Chancellor of the Methodist University of Ghana, Professor William Baah-Boateng, has welcomed the President’s acceptance of moderate depreciation as encouraging for the economy.

    “If the president aims to keep the exchange rate beyond 5% then that is excellent. Now we are doing about GH¢12. When you take 5% of GH¢12, you are looking at about 60 pesewas. So, if the cedi hovers around GHc2.60, then it is the same as stability. If we can work around that, then that is what we will all be happy about,” he explained.

    The economist also praised Ghana’s recent progress on inflation management, attributing it partly to the cedi’s appreciation and improved food supply during the ongoing harvesting season.

    “So far, we have done well when it comes to inflation because the appreciation of the cedi has contributed. Also, now we are in the harvesting season, and we have food in abundance,” he noted.

    However, he cautioned that demand for foreign exchange could rise in the coming weeks as imports surge ahead of the festive season.

    “But what we have to work on is meeting the foreign exchange demand that will come as a result of imports for the festivities. If the central bank can meet that, then we will be able to maintain it at that level,” he advised.

     

    By Adnan Adams Mohammed

  • Explainer: Why the cedi is slipping

    Explainer: Why the cedi is slipping

    The cedi has had one of its most dramatic years in recent memory. It opened in 2025 at GH₵14.7 to the dollar. By February it had weakened slightly to GH₵15.50 and held there until April, making it one of the longest periods of stability in more than a decade.

    Then came the surprise. Between April and May the cedi shot up, strengthening from GH₵15.50 to GH₵10.30 in just five weeks.

    From May through July and into early August it stayed stable again, hovering between GH₵10.3 and GH₵10.5. But by mid-August the tide had turned.

    In only three weeks, it has slipped to GH₵11.90, making it one of the worst-performing currencies in the third quarter of 2025.

    External conditions have not changed much. In fact, they should still be in Ghana’s favour.

    Gold prices are at record highs, the U.S. dollar remains subdued, and the Federal Reserve is expected to cut interest rates soon—moves that normally support the cedi. The pressure is instead domestic.

    Remittances, which are a critical source of foreign exchange, appear to have slowed. The earlier strength of the cedi distorted the incentive.

    For instance, if someone abroad sent US$100 in April, that converted into about GH¢1,550, enough to buy roughly 150 cement blocks. By May, the same US$100 fetched just GH¢1,030, barely enough for 100 blocks.

    With their dollars suddenly buying fewer goods in Ghana, many senders simply held back, betting that the cedi would weaken again. If it did, their transfers would convert into more cedis.

    This pause in inflows removed a steady cushion of dollars from the market just as import demand was rising.

    Imports have also surged because traders rushed to take advantage of the stronger cedi to stock up ahead of the festive season, adding to the pressure.

    At the same time, there are signs the Bank of Ghana has cut back its dollar supply to the market.

    Why scale back? The reasons are not fully clear, but there are strong clues.

    The IMF had warned earlier this year that the Bank of Ghana was intervening too heavily after it injected about US$1.4 billion into the market in the first quarter of 2025.

    In response, the Bank pledged to introduce a formal framework for forex interventions by the end of September.

    The recent slowdown in interventions may be a trial run ahead of that policy rollout.

    Another factor may be the wide gap between the interbank and forex market rates. While the cedi traded at around GH¢10.30 to the dollar on the interbank market, it was consistently between GH¢11 and GH¢12 at forex bureaus.

    Allowing some depreciation on the official side may be a way to bring the two markets into alignment, since the parallel rate divergence was distorting the market.

    Meanwhile, the Bank has also tightened its regulations: reminding businesses that pricing in dollars is illegal, enforcing declaration requirements for travelers, blocking firms from withdrawing foreign currency they never deposited, demanding stricter documentation before importers can access forex, and clamping down on remittance operators who sidestep regulations.

    The cedi’s performance so far in 2025 has been remarkable, though the recent slip is a reminder of how fragile sentiment can be.

    Whether stability holds will depend less on global winds than on how firmly the Bank of Ghana sticks to its new playbook.

    For now, with gold prices still hovering around US$3,500 per ounce and foreign reserves above US$11 billion, the Bank of Ghana has the firepower to steady the market.

    Panic may be premature.

    Caleb Wuninti Ziblim, is with JoyNews Research
    Email: caleb.ziblim@myjoyonline.com

     

     

     

  • Cedi falls 13% in Q3

    Cedi falls 13% in Q3

    The recent depreciation of the world’s best performing currency a few months ago, the Ghana Cedi, has left many stakeholders upbeat despite heightened speculation.

    Data from Bloomberg indicates that the Cedi had recorded a 13% depreciation in the third quarter so far, rating as the biggest global currency decline.

    Analysts have linked the current trend to surge in demand for US dollars as traders rushed to take advantage of the stronger Cedi to stock up ahead of the festive seasons. At the same time, there are signs the Bank of Ghana has cut back its dollar supply to the market.

    “As at last week, banks that filed dollar needs on behalf of their clients to the Bank of Ghana got about half of their requests,” Hamza Adam, head of market-risk management at UMB Bank Ltd said in an interview granted to Accra-based media. “This week the central bank is trying to meet all demand.”

    The shift in the central bank’s intervention in a likely response to the International Monetary Fund (IMF) cautioning against excessive intervention to control the forex market; and the rush by traders to stock ahead of the festive seasons and other factors have erased some of the cedi’s 50% gain that was underpinned by a stronger gold bullion price.

    Meanwhile, the central bank has assured stakeholders to be optimistic as the current trend is normal in the forex market.

    “The cedi should be stable within a reasonable range,” the bank said in an emailed response to Bloomberg’s questions. “Our role at the Bank of Ghana is to ensure that fluctuations remain orderly, that they reflect fundamentals and that they do not undermine confidence in the broader economy.”

    At the same time, other analysts have argued that external conditions have not changed much. In fact, they should still be in Ghana’s favour, since gold prices are at record highs, the U.S. dollar remains subdued, and the Federal Reserve is expected to cut interest rates soon—moves that normally support the cedi.

    “The pressure is instead domestic”, Caleb Wuninti Ziblim, a Joy News Researcher alluded.

    He emphasised that, “Remittances, which are a critical source of foreign exchange, appear to have slowed. The earlier strength of the cedi distorted the incentive.

    “For instance, if someone abroad sent US$100 in April, that converted into about GH¢1,550, enough to buy roughly 150 cement blocks. By May, the same US$100 fetched just GH¢1,030, barely enough for 100 blocks. With their dollars suddenly buying fewer goods in Ghana, many senders simply held back, betting that the cedi would weaken again. If it did, their transfers would convert into more cedis.

    “This pause in inflows removed a steady cushion of dollars from the market just as import demand was rising.”

    Ghana’s import-dependent economy ships in everything from food to machinery. Demand for products from abroad tends to increase toward the end of the year as businesses stock up before the Christmas-holiday season.

    While Ghana’s gross international reserves soared to a three-year high of US$11.1 billion by the end of June, the central bank won’t deploy sufficient funds to fully meet demand for foreign exchange.

    Consequently, the Ghana National Chamber of Commerce and Industry (GNCCI) has called on the government to step up efforts to stabilise the exchange rate to enhance the standard of living and sustain economic growth.

    According to the Chamber, a balanced approach is required to ensure a win-win situation for importers, exporters, and government revenue.

    “The President once indicated that the target was to peg the exchange rate between GHc10 and GHc12 to the dollar. I would be concerned if it escalates beyond that,” Michael Kabutey, the National Treasurer of GNCCI, reflected while speaking at the Czech–Ghana Business Cooperation Seminar in Accra last week. “I want to believe the government is monitoring the situation and will act to prevent a return to the high levels we experienced in the past.

    “There should be a win-win situation for importers, exporters, and government taxation. At the moment, the government is not generating much tax revenue from the ports, but striking a balance is necessary—and I am confident steps are being taken in that direction,” he said while stressing that exchange rate stability is crucial for business expansion and investor confidence.

  • Cedi records 5.3% year-to-date depreciation against US dollar

     

    Ghana Cedi records 5.3% depreciation against the US dollar in Q1 2025.

     

    Adnan Adams Mohammed

     

     

    Bank of Ghana data indicates that the Ghana Cedi lost 5.3% in value to the US dollar from January to March this year.

     

    As at last week, the local currency traded averagely at a rate of GH¢15.53 to the US dollar on the interbank market. However, in January and February 2025, the local currency lost 5.3% and 3.9% in value respectively to the US dollar.

     

    Unfortunately, the cedi recorded its worst depreciation of 9.20% to the Euro on the interbank market in quarter one of 2025, which traded at GH¢16.75 as at last week.

     

    Also, the cedi lost 8.2% in value to the British pounds sterling, which traded at GH¢20.03 to one pound on the interbank market.

     

    The potential upside however is that it is expected that a team from the International Monetary Policy (IMF) would visit Ghana this week to commence the fourth review of the US$3.0 billion Economic Credit Facility programme.

     

    The team’s assessment would be focused on the country’s performance under the Fund programme so far and the 2025 Budget.

     

    Analysts believe a successful review could pave the way for another tranche disbursement, which would help BoG’s sell-side intervention. This will consequently help stabilize the cedi.

     

  • Cedi ranked 4th weakest in Sub-Saharan Africa – WB

    Cedi Depreciation

     

     

    Adnan Adams Mohammed

     

    After losing approximately 24 percent of its value against the US dollar, the Ghana Cedi is currently the fourth weakest or worst performing currency in Sub-Saharan Africa (SSA).

     

     

    This is according to the World Bank’s October 2024 Africa Pulse Report launched last week. Ghana is ahead of Nigeria, Ethiopia and South Sudan with worst performing currency in 2024.

     

    South Sudan’s pound recorded over 60% loss, Ethiopia’s birr (51%), and Nigeria’s naira (over 40%). In contrast, the Kenyan shilling has emerged as the best-performing currency in Africa, showing a year-to-date appreciation of about 21% as of August 2024.

     

    “Ethiopia, Ghana, and Nigeria are among the worst-performing in Africa this year, with their currencies continuing to weaken under mounting pressure for foreign exchange,” the report stated.

     

    It further explained that by the end of August 2024, the Ethiopian birr, Nigerian naira, and South Sudanese pound had experienced significant depreciation.

     

    The Nigerian naira, in particular, lost around 43% of its value due to the central bank’s heightened demand for US dollars in the parallel market, limited dollar inflows, and slow disbursement of foreign exchange to currency exchange bureaus.

     

    On the other hand, some currencies that weakened in 2023 have seen a recovery or stabilisation.

     

    The Kenyan shilling’s 21% appreciation stands out, while the South African rand and currencies pegged to it have strengthened by 3.1% this year, after significant losses in the previous year.

     

    Despite these improvements, the report warns that exchange rate pressures and foreign exchange shortages remain major concerns for African policymakers.

     

    More than a third of the 30 countries and two currency unions (the Economic and Monetary Community of Central Africa and WAEMU) surveyed are expected to have less than three months’ worth of import cover in international reserves by the end of 2024.

     

     

  • Increasing cost of doing business, labor agitation leading cause of cedi depreciation 

    Forex trading

     

     

    Adnan Adams Mohammed

     

    A research institute has attributed the hiking foreign exchange rates and persistent inflation to high cost of doing business, increasing labor agitation and corruption.

     

    In its assessment of midyear budget review, the Institute of Statistical, Social and Economic Research (ISSER) at the University of Ghana admitted that, the cedi has experienced significant depreciation against major foreign currencies.

     

    The Institute therefore wants the government through the Bank of Ghana to reinforce monetary policies and control measure to strengthen the local currency, Cedi.

     

    “.. the central bank should increase its presence in the exchange rate market,” ISSER admonished.

     

    Data from BoG indicates that, in the first half of 2024, the cedi depreciated by 18.6 percent against the US Dollar, 17.9 percent against the Pound Sterling, and 16.0 percent against the Euro.

     

    The cedi recorded a depreciation of 27.8% against the U.S Dollar, 31.9 % against the Pound, and 30.3 % against the Euro in 2023. Also, a 30.0 % depreciation against the Dollar, 21.2 % against the Pound, and 25.3 % against the Euro in 2022.

     

    “This suggests some stabilization of the exchange rate over the past three years,” the report stated.

     

    However, the cedi was generally more volatile against major foreign currencies in the first half of 2024 compared to the same period last year.

     

    Despite this volatility, the cumulative depreciation rates were relatively lower, but ISSER urged the government to take additional measures to curb the cedi’s depreciation.

     

    The report recommended that the government reduce the rate of cedi depreciation, boost exports to lessen foreign exchange demand, and enforce stricter forex regulations.

     

    On inflation, the Institute noted that June 2024 inflation had decreased to 22.8 %, a significant drop from the peak of 54.6 % in December 2022.

     

    Despite this reduction, the figure remains high compared to the 12.6 % inflation rate in December 2021.

     

    ISSER urged the government to address the commodities driving inflation and consider improving infrastructure in key food-producing areas to reduce transportation and fuel costs.

     

    “For instance, enhancing the road network in areas designated as the food basket of Ghana and reducing foreign exchange rates can help lower transportation and fuel costs, subsequently reducing both food and non-food inflation to single digits,” the report concluded.

     

     

  • Inflation to end year at 17%… as BoG tightens monetary control.

     

    Adnan Adams Mohammed

    GCB Capital has predicted an end of year inflation of 17 percent amidst tightening of the monetary policy by the Bank of Ghana.

    GCB Capital further predicts that May inflation will fall to 21% from April inflation of 25%.

    It notes that, the predicted decline will be influenced largely due to base effects. However, there are significant concerns, among market players, about the potential impacts of the recent depreciation of the cedi and its delayed consequences on prices.

    With GCB Capital worried over the “second-round effects”, such is seen as a significant risk to the short-term economic outlook noting that; “The recent rise in ex-pump petroleum prices, leading to increased transport fares, is expected to drive up general prices further.

    “With quarterly utility tariff adjustments yet to be implemented and prevailing economic uncertainties, the risk of near-term inflation remains high.”

    GCB Capital proffered that, such “situation necessitates a persistently tight monetary policy to manage inflation expectations and support the disinflation process.”

    In line with its suggestion, the Monetary Policy Committee (MPC) last week maintained a tight monetary policy stance to counter emerging inflationary pressures from currency depreciation and transport fare increases.

    The MPC’s latest forecasts indicate a slightly elevated inflation profile due to the cedi’s depreciation and recent transport fare hikes.

    BoG

    Adding that, achieving this target hinges on maintaining a strict monetary policy and implementing aggressive liquidity management operations.

    Consequently, GCB Capital acknowledges the MPC’s decision to align with its expectations and the market view, noting that, the evident risks to inflation necessitate continued vigilance and policy strictness.

    According to the central bank, inflation has significantly decreased from 41.2 percent in April 2023 to 25 percent in April 2024. This notable reduction in inflation is observed in both the food and non-food components.

    The central bank attributes the decline in inflation to several factors: relative stability in the local currency, a tighter monetary policy stance, and stable petroleum prices.

    Despite the sharp disinflation from April 2023 to April 2024, inflation remained sticky in the first quarter of the year, hovering around 23 percent with a slight increase in March.

    The sluggish disinflation process can be explained by a reduced supply of some seasonal food items and exchange rate depreciation, particularly impacting non-food inflation.

  • Spending beyond the budget worsening Cedi woes and likely to derail IMF Program – Minority .

     

    Adnan Adams Mohammed

    The Minority Caucus in Ghana’s Parliament has raised concerns over the government’s recent borrowing of GH¢7 billion from the treasury bills market to cover expenses outside its budgetary allocations.

    According to the Minority, this practice of extending expenditure beyond the budget for political purposes is exacerbating the depreciation of the cedi against the dollar.

    Cedi depreciation

    They abhor the government’s management of the Ghanaian cedi, warning that it could jeopardise the International Monetary Fund (IMF) programme by year-end.

    “This [IMF] programme is likely to derail by the end of this year, and recovery could take a significant amount of time”, Dr Ato Forson, Minority Leader in Parliament noted in an interview last week. Adding that, “I have strong convictions” that the programme will not stay the course.

    “Let’s observe how it unfolds,” he emphasised, putting it all down to fiscal policies.

    He said the government was “on course” but pointed out: “As you know, the review dates back”.

    “So, the next review is going to use the data as of December last year. So, the programme indicators to check whether the programme is performing or not is going to use data six months before the time of review. So, obviously, six months before, it was good. But I can tell you that based on the data and the way they are conducting the affairs of the policy going forward, there is going to be a complete commotion,” he said.

    Dr. Forson, criticised the government’s fiscal strategies, indicating that efforts to stabilise the national currency are inadequate and may pose risks to the economy.
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