Forex Bureau Foreign Exchange Rates Out, Dollar Crosses GHS13.00

Three critical implications of the continuous depreciation of the Ghana cedi against the dollar and major trading currencies

Inflation on the rise: Imports become pricier due to a devalued cedi. This is due to the fact that Ghanaian businesses and consumers require more cedis to purchase the same quantity of dollars (or other currencies) for imported goods. These rising expenses are typically transferred to customers in the form of increased prices, resulting in inflation. This could significantly impact individuals with lower incomes who allocate a greater percentage of their earnings to basic necessities.

With inflation on the rise because of a weaker cedi, Ghanaians are experiencing a decline in their purchasing power. Despite nominal wage increases, purchasing power has decreased. This may result in a decrease in living standards for numerous individuals, making it more challenging to cover essential needs such as food and fuel.

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Export Discouragement: A devalued cedi can also have negative implications. This could lead to Ghanaian exports becoming more affordable on the global market, which may help to enhance those industries. Yet, in Ghana, the frequent instability tends to overshadow this advantage. Companies might be cautious about venturing into exports because of the unpredictable currency exchange rates, which can impede future expansion.