Cedi depreciated by just 1.8% for the first half of 2023 – Ofori-Atta touts cedi stabilization

Finance Minister, Ken Ofori-Atta has disclosed that the local currency showed great strength against the major trading currencies in the first half of 2023.

According to the Finance minister, the cedi which depreciated against the major currencies average 20% in the last two years, has only depreciated by just 1.8% for the first half of 2023.

Presenting the 2023 Mid-Year Budget Review in Parliament on Monday, July 31, the Minister said the resurgence of the Ghanaian currency is laudable.

According to him, the government is focused on doing the hard work to ensure that the depreciation is contained.

“Overall, first-quarter growth for 2023 was 4.2 percent, up from 3.0 percent recorded for the same period in 2022. This growth largely reflected an increase in the services sector which recorded a growth of 10.1 percent.”

“Headline inflation eased in the first half of 2023. From the peak at 54.1 percent in December 2022, headline inflation gradually trended downwards from 53.6 percent in January 2023 to 42.5 percent in June 2023. The moderation in inflation was largely supported by monetary policy tightening, relative stability in the exchange rate, and lower and stable ex-pump petroleum prices;

“Cumulatively, the Ghana cedi depreciated by 22.1 percent against the US Dollar in the year to July 17, 2021, compared to 21.1 percent in the same period in 2022. The Cedi, excluding the January 2023 depreciation of 20%, has depreciated by an impressive 1.84% between February and July 17, 2023.”

Mr. Ofori-Atta also revealed that “total export receipts fell by 7.9 percent to US$8,178.56 million on the back of lower crude oil exports receipts. Crude oil exports declined by 41.3 percent year-on-year due to a 21.4 percent decline in volumes and a 25.3 percent fall in prices.

“Current account recorded a provisional surplus of US$849.16 million (1.1% of GDP) compared with a deficit of US$1,111.87 million (1.5% of GDP) for the same period in 2022; and Gross International Reserves dropped from US$6.2 billion at the end of December 2023 to US$5.3 billion (2.5 months of import cover) in June 2023, reflecting BOG’s objectives of reducing their foreign liabilities in line with the IMF program.”

“Net International Reserves received a boost from gold reserves and improved to US$2,353.95 million equivalent to 1.1 months of import cover, compared with US$1,440.00 million (0.6 months of import cover) recorded at the end of December 2022,” Mr Ofori-Atta explained.