The Ghanaian Cedi has been gaining value against major foreign currencies such as the US dollar, Euro and the Pound Sterling over the past few weeks.
This appreciation in the value of the Cedi has been a major boost for the country’s economy as it allows for more purchasing power of the local currency and a more stable exchange rate.
The rise in the value of the Cedi is mainly attributed to the government’s efforts to curb the dollar’s appreciation. The government has implemented a number of measures to ensure that the value of the Cedi remains stable. These include an intervention fund which was set up to provide funding to the Bank of Ghana in order to purchase foreign exchange to support the Cedi.
In addition to this, the government has also taken steps to reduce the country’s reliance on foreign currency. This has included measures such as the introduction of the Ghana Cedi Bond, which is a bond denominated in local currency, and the establishment of the Ghana Cedi Exchange Rate Stabilization Fund.
Both of these initiatives are aimed at providing the Bank of Ghana with the necessary funds to purchase foreign currency in the event of an appreciation in the value of the dollar.
Another factor that has contributed to the appreciation of the Cedi is the reduction in fuel prices. In November of 2020, the government reduced the price of fuel by 10 percent. This was done in order to provide relief to the citizens of Ghana who were struggling with the high cost of living.
The reduction in fuel prices has resulted in more citizens having access to fuel, which in turn has increased the demand for local currency, thus leading to the appreciation of the Cedi.
The government has also implemented tax incentives to encourage local businesses to invest in the economy. This has been done in order to stimulate the local economy and create jobs.
By providing these incentives, the government is hoping to attract more investors and businesses to the country which will in turn help to strengthen the economy and the Cedi.
Overall, the appreciation of the Cedi can be attributed to the government’s efforts to curb the dollar’s appreciation and reduce the country’s reliance on foreign currency.
In addition to this, the reduction in fuel prices and the implementation of tax incentives have also played a major role in the appreciation of the Cedi. With the government’s continued efforts, the Cedi is likely to remain stable and continue to gain value in the coming months.