Ghanaians may soon see a drop in the cost of goods and services, thanks to the recent strong performance of the cedi.
According to the Governor of the Bank of Ghana, Dr. Johnson Asiama, the currency’s appreciation will gradually lower import costs, which should reflect in prices.
Addressing the media after the Monetary Policy Committee meeting on May 23, 2024, Dr. Asiama explained that while changes in inflation typically lag behind exchange rate movements, the economy is on course for relief.
“Some goods were stocked at a higher rate, so it takes time for prices to adjust. But with competition, that adjustment will happen,” he said.
The cedi has gained 24.1% against the US dollar this year, and also made notable gains against the pound and euro. It now trades at GH₵11.85 to the dollar, GH₵15.84 to the pound, and GH₵13.34 to the euro.
Dr. Asiama dismissed concerns that the cedi’s rally could hurt exports, noting that the rise isn’t significant enough to threaten trade competitiveness.
Retailers and importers are being urged to reflect the improved exchange rate in their pricing, reinforcing efforts to stabilize the economy.
In a related development, Dr Asiama said days ago that Ghana’s early macroeconomic recovery is the result of decisive monetary policy action and improving fundamentals.
Speaking at the 124th Monetary Policy Committee (MPC) meeting in Accra, he attributed the drop in inflation to 21.2% last month to the March policy rate hike to 28%, exchange rate stability, and easing non-food inflation.
“Preliminary evidence suggests that this action has contributed to dampening inflation momentum and, importantly, the cedi has appreciated by nearly 19 per cent between April and May,” Dr Asiama noted. “This has helped ease imported inflation and restore public confidence.”
The cedi’s appreciation, he said, reflects improved market sentiment, external gains, and prudent policy. From March 12 to May 12, the cedi strengthened from GH¢15.53 to GH¢13.09 per dollar, with similar gains recorded against the euro and pound.
Though optimistic, Dr Asiama acknowledged the recovery remains fragile. “There are encouraging signs of progress, but the path ahead is complex and fraught with risks, both global and domestic,” he said.
