Ghana Cedi Ranked Best Currency in Africa

Obiajulu Joel Nwolu

Ghana’s legal tender has been ranked the best performing currency in Africa for the first quarter of 2021.

It appreciated at 0.6 per cent to the US dollar, bettering some other prevalent 15 currencies in Africa. Among the currencies are the Egyptian pound, Nigerian naira and the South African rand, Ghanaweb reports.

A report by Joy Business monitored by GhanaWeb showed that the cedi’s performance is almost similar to that of 2020.

Also, the currency has benefitted from growth-related efforts such as diversified exports of cocoa, gold among others.

Courage Martey, a Senior Economic Analyst at Databank Research, while adducing the rationale for the growth of cedi said, “the Ghana cedi ended the first quarter of 2021 with yet another impressive performance, similar to what it did in the first quarter of 2020.”

“You will recall that in the first quarter of 2020, the local currency ended the quarter with an appreciation of almost 1.7% against the US dollar and that made it the second most resilient currency in our basket of 15 African currencies, only behind the Egyptian pound.”

“It is quite impressive, against the fact that the pandemic has not yet given way, so there is still so much uncertainties within the global financial market space,” he said.

Martey attributed the cedi’s strong performance due to the Bank of Ghana’s intervention measures, particularly in the Forex (FX) Forward market.

He added, “Immense thanks to the Bank of Ghana’s intervention measures, particularly on the FX forward market but the significant inflows of foreign portfolio investments into the bond market especially during this year has been significantly supportive of the Ghana cedi to put up the kind of performance we see in the first quarter of 2021.”

This post was written by Obiajulu Joel Nwolu.

The views expressed here belong to the author and do not necessarily reflect our views and opinions.

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