Cedi depreciates 74% to dollar in past 3 years; faces further risk – IEA

The Ghanaian cedi has lost about 74% of its value against the US dollar over the past three years, as reported by the Institute of Economic Affairs (IEA). Key depreciation rates include 30.0% in 2022, 27.8% in 2023, and nearly 29% so far in 2024.

The IEA highlighted several factors heightening risk to the cedi’s stability, such as election-related uncertainties pushing demand for the dollar as a safe haven and uncertainties about Ghana’s IMF program.

Additional concerns include ongoing debt negotiations with commercial creditors and a weaker cocoa crop, potentially limiting foreign exchange inflows.

The IEA stressed the need for robust economic reforms to address Ghana’s persistent currency depreciation and stabilize exchange rates in the long term.