But the cedi is not yet out of troubled waters. Audio chat On the move? Call Us Call our hotline for further information. Do you ever witness news or have a story that should be featured on Pulse Ghana? SYP - Syrian Pound. But today, the country appears to be enduring what it did not bargain for in that fiscal transaction in , sharp depreciation of the Ghana cedi to the point of being once counted among the worst performing currencies in the world.
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South African Rand(ZAR) To Ghanaian Cedi(GHS) Exchange Rates History
Similarly, the spread between the rates in the interbank and forex bureau markets has also widened. The unusually strong demand for foreign exchange seen in the first quarter of can be attributed to the PBC and some of the consequences that have flowed out of that. In the recent period, the factors that have been at play in the foreign exchange market are the following:.
Thus, the expansion in the economy has resulted in greater demand for foreign exchange and additional pressure on the cedi to depreciate. Increased trade with China The rising volume of trade with China has changed the demand patterns for foreign exchange.
This is because imports from China are predominantly paid for in cash rather than with Letters of Credit LCs which spread out payments over a period of time. As a result, there has been an increased reliance on cash holdings of foreign exchange which has accentuated the seasonal pressures — particularly for the year-end holidays.
Much of the demand for foreign exchange in cash occurs in the forex bureau market. As such, the change in the pattern of trade towards more cash-based transactions, particularly with China, would have a greater impact on forex bureau rates.
This could explain the relatively sharper depreciation seen in the forex bureau market and the resulting wider spreads between the forex bureau and interbank markets. The stable exchange rate — over the past two years, together with the entry into the oil era, provided good opportunities for foreign investors in the domestic bond market — high even if falling interest rates and expectations of currency appreciation.
Worsened prospects for investments negatively impact net foreign exchange inflows — as foreign investors pull out their investments — and put depreciating pressure on the cedi. Accurate forecasting by the BOG of foreign exchange cash flows — i.
The BOG's failure to anticipate the surge in demand for foreign exchange in the last quarter of — resulting from the rapid rise in imports, the early redemption by foreign investors of their investments in the domestic bond market, and the speculative activities of dealers and traders — therefore meant that it was unable to intervene in the market sooner or adequately enough to curb the depreciation in the cedi. The ECF program target of 3 months of import cover further constrains the degree of intervention by the BOG as international reserves that are marginally above the threshold would limit how much foreign exchange the BOG can released onto the market.
Historically, Ghana's experience in election years has been one of fiscal indiscipline and excessively large fiscal deficits that have resulted in macro instability — high inflation and a depreciation of the currency — in the ensuing years and that have called for painful fiscal adjustment programs to be implemented. World Bank studies have shown that, when compared to the years before, the fiscal balance in election years generally deteriorates by about 1.
Rising government expenditures — wages and subsidies — and public investments, combined with credit-fueled private consumption, raise aggregate demand and may result in rising imports, currency depreciation, and inflation.
Based on Ghana's experience in the 4th Republic with the political business cycle PBC and the uncertainties about this election year the foreign exchange market is pricing in a depreciation of the cedi. Foreign investors have, thus, begun to take the necessary precautionary steps to protect their investments.
While foreign investors are only permitted to hold longer dated — 3 or 5 year — cedi denominated bonds, they are not bound to hold them to maturity. In other words they are free to sell these bonds at anytime as the BOG stands ready to rediscount them at a 'market rate'.
The reduction in net capital inflow that results from foreign investors reducing their holdings of domestic assets exerts depreciation pressure and increases the potential for a negative feedback cycle of depreciation. Banks hold excess reserves when their total reserves — held at the central bank and in vault cash — exceed the required 9 percent of total deposits. When this is the case, the excess reserves may be loaned out to support private consumption or investments — resulting in inflation — or they may be used to purchase foreign exchange — causing depreciation.
The high terms of trade for cocoa and gold that increased foreign exchange inflows and boosted the international reserves of the BOG have also contributed to the excess liquidity in the system. This is because in building its foreign exchange reserves the BOG injects cedis into the system — this is to buy up the foreign currency.
The additional cedis in the system, however, need to be mopped up to prevent them from causing inflation and subsequently depreciation of the currency. Speculation by FX traders Speculative activity by foreign exchange traders trying to profit from the depreciation of the cedi has put additional pressure on the currency. Other market participants who are also trying to hedge against further depreciation have also contributed towards exacerbating the situation.
Mitigating responses by the BOG The depreciation of the exchange rate remains a major source of concern for the BOG due to its possible consequences for inflation as well as its implication for the accumulation of international reserves. These concerns, thus, call for decisive policy measures to be taken to stem the fall in the cedi and to maintain the gains that have been made in macroeconomic stability.
The Bank of Ghana has taken a number of steps in an attempt to stabilize the currency. These measures have been aimed at:. One way to reduce the excess demand for foreign exchange and hence the depreciation pressure on the cedi is to increase the supply of foreign currency on the market. To this end, the efforts made by the Bank of Ghana have included the following:. Drawing down of international reserves The BOG has intervened in the foreign exchange market to sell foreign exchange, thereby increasing the supply of foreign exchange onto the market.
Currently, international reserves are only marginally above the threshold of 3 months of imports stipulated by the ECF program with the IMF. Such slim buffers above the agreed program target, therefore, limit the BOG's flexibility to intervene further in the foreign exchange market.
The interventions by the BOG in the foreign exchange market have, however, not been sufficient to stem the downward trend in the cedi; and concerns have been raised by the central bank governor over the divergence in the rates quoted by traders operating in minor segments of the market. In light of these concerns, additional measures have been taken to increase the supply and reduce the demand of foreign exchange in the market and hence stabilize the currency.
Reduction in the net open positions of banks In order to increase the supply of foreign exchange by banks to the market, the BOG has lowered the required single net open position NOP of banks from 15 percent to 10 percent of capital and the aggregate NOP from 30 percent to 20 percent.
The NOP is the difference between a bank's foreign currency assets and foreign currency liabilities and it can be calculated for assets and liabilities in a single currency single currency NOP , or for assets and liabilities in all currencies aggregate NOP. A reduction in the required NOP, therefore, would imply that net foreign currency assets in excess of the requirement would have to be supplied to the market.
The increased supply of foreign exchange onto the market would then dampen demand pressures and attenuate the pressure on the cedi to depreciate. For prudential purposes, the BOG requires that 9 percent of bank deposits, both local currency and foreign currency, be held as reserves at the central bank. Previously, reserve balances were held in their corresponding currencies — i. In its press release of April 27, , however, the BOG announced that all banks will now be required to maintain the mandatory 9 percent reserve requirement on domestic and foreign deposit liabilities in Ghana cedis only.
This requirement to hold all reserves in local currency is aimed at freeing up foreign exchange locked in reserves, thereby increasing the supply of foreign exchange onto the market. The increase in supply will satisfy some of the excess demand in the market, and depreciation pressures on the cedi will ease.
Other measures that have been taken by the BOG have been targeted at withdrawing excess liquidity from the system — thereby making less cedis available to chase after foreign exchange. These measures will result in a better alignment of monetary policy with exchange rate policy. The increase in the MPR, which translates into increases in other market interest rates such as Treasury bills and notes, makes cedi assets an attractive alternative to holding foreign currency and as such acts as a means of absorbing excess liquidity in the system and, therefore, reducing the demand for foreign exchange.
Higher yields on Treasury bonds 3 and 5-year bonds that make them attractive investments to foreign investors also serve as a means of mobilizing foreign exchange to build up the international reserves of the BOG. Vostro accounts are accounts maintained by foreign banks with banks in Ghana that allow the foreign banks to buy local currency. Foreign currency deposits into these accounts are thus meant to represent 'orders' by foreign banks to buy Ghanaian cedis — for transactional or investment purposes.
There are reported cases whereby inaccurate exchange rates have updated in some online sites resulting into erroneous calculations and conversions of money. Reliance on the data contained in such online sites might lead to great loss and damages. There is importance to be fully informed regarding the risks and costs associated with trading the financial markets since it is one of the riskiest investment forms possible. Some factors to consider before converting your Ghanaian cedis to dollars and pounds include:.
It is important to note that countries with a consistently lower inflation rate always exhibit a rising currency value, as its purchasing power rises in relation to other currencies of the other trading partners.
This is very important in determining the real value of your Ghanaian cedis when converted to dollars. A low inflation rate in Ghana will translate into a rise in the value of the cedis when converted to dollars and pounds. The interest rates added as a service fee for the exchange of your Ghanaian cedis to dollars and pounds play a major role in determining the amount of money you will be going home with at the end of the day. Most online sites offering services on how to convert your Ghanaian cedis to dollars and pounds offer low-interest rates that are designed to ensure that the clients are not exploited.
Exchange rates are all highly correlated to the interest and inflation rates. The most important rule to remember is to bargain for everything. It should always be friendly bargaining. Try not to be annoyed and never get angry. Do not counter offer with the price you are willing to pay! The seller will act insulted, so then you haggle back and forth until an agreement is reached. After some short back and forth, you can make an ugly face or a disappointed sound.
You are asking too much. I beg, I am in Africa as a poor person and cannot pay that much. And then if you cannot reach a deal, move on. That act of moving may suddenly get a further reduction in price. Fridays or Saturdays and the day before holidays can be great shopping, when people are looking for some extra cash. Do not feel bad for the seller. They know you are at a disadvantage and do not know the correct prices or how to bargain.
They understand quite well the economics of their business and will rarely sell things at a loss. Similarly, never get into a taxi without determining the price first. When a taxi stops, greet him through the open car window and tell him where you are going. When he tells you to "get in", your reply should be "How much?
Depending on traffic, time of day, your destination, and the driver's mood, the price he offers may be anywhere between the typically quoted twice what the rate should be, and a fair price yes, this does happen on occasion.
This can be a fun experience at markets and especially in villages. Bartering is an exchange of goods or services rather than money to make a purchase. Before you depart, determine which of the possessions you are bringing that you can part with. You may even go out to inexpensive shops to purchase things to bring to Ghana for bartering.
Not only does this give you a valuable gift to distribute, but it also gives you a slight advantage when bargaining. Unlike a cash transaction, where the Ghanaian seller knows quite well the market, when bartering, you are the one who knows the value of your "currency".
This is probably the biggest crime that you will experience while in Ghana. Always check the math on bills and always count your change carefully, even at banks. Except outside of supermarkets and larger stores, prices for things are not set, and even a set price usually has some wiggle room. Because of this, vendors will often take advantage of foreigners that they suspect may not know the price for an item.
When unsure, you can hold your hand out for a couple extra seconds when receiving your change if you think more is due.
Ghanaian Cedi(GHS) Exchange Rates Today
The Ghanaian Cedi is the currency of Ghana. Our currency rankings show that the most popular Ghana Cedi exchange rate is the USD to GHS rate. The currency code for Cedis is GHS, and the currency symbol is GH¢. Below, you'll find Ghanaian Cedi rates and a currency converter. Ghanaian Cedi exchange rates and currency conversion. Ghana currency (GHS). Track Cedi forex rate changes, track Cedi historical changes. Directory of best currency transfer providers, compare to exchange rates when sending money from Ghana. Currency Converter;. Guidelines on Operations of Electronic Payment Channels in Ghana Payment Systems and Services Bill, Schedule for Payment of Mobile Money Interest to Customers.