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Cedi Depreciates 4.70% To Dollar In Only 45 Days Of 2022

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Cedi Depreciates 4.70% To Dollar In Only 45 Days Of 2022
The Ghana cedi has depreciated by 4.70% to the US dollar with only 45 days into the year, as pressure mounts on the local currency.

This ranks it the second worst performing currency in Africa, among 15 top performing currencies.

The Zambian kwacha which was one of the top performing currencies in Africa in 2021, surprisingly, is the worst so far this year. It has declined in value by 11.29% to the dollar.

Analysts have attributed the cedi’s problem to upside risks to the economy including high debt and interest payments, inadequate revenue and rising expenditure.

This has led to selling pressures by investors in Ghana’s international bonds and the lack of access to the international capital markets

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To this end, credit rating agencies, Moody’s and Fitch reviewed Ghana’s credit worthiness downwards.

The revised credit rating has however complicated Ghana’s capacity to borrow from the international bond market, whilst paying higher interest or premium on existing bonds to investors.

Cedi depreciation conditions in quarter 4 to persist till June 2022

The conditions that triggered the persistent depreciation of the cedi during the latter part of last year is expected to  persist till the end of the first half of 2022, Databank Research has projected.

The local currency, it said, remains vulnerable to foreign portfolio outflows amidst the elevated import demand.

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The heightened uncertainty around Ghana’s fiscal outlook worsened the local currency’s woes in the latter part of 2021.

“We expect these conditions to persist in first-half of 2022 in addition to corporate import demand as Ghana’s economy rebounds”, it said.

Again, the low prospect of an early-2022 Treasury issuance on the international capital market also exposes the cedi to depreciation pressure in the first half of this year.

AFRICA TOP PERFORMING CURRENCIES  

CURRENCY YEAR-TO-DATE PERFORMANCE     RANKING
South African rand 4.56% 1st
Namibian dollar 4.49% 2nd
Botswana pula 1.76% 3rd
Uganda shilling 0.84% 4th
Egypt Pound 0.02% 5th
Coted’lvoire CFA 0.00% 5th
Malawi kwacha 0.00% 5th
Tunisia dinar 0.07% 8th
Tanzania shilling -0.01% 9th
Kenya shilling -0.43% 10th
Mauritius rupee -0.43% 10th
Nigerian naira -0.82% 12th
Morocco dirham -1.18% 13th
Ghana cedi -4.70% 14th
Zambian kwacha -11.29% 15%

 

 

 

 

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Source: GhArticles.com

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Salaries Paid Via MoMo Will Attract E-Levy – GRA Warns

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E-levy: GRA To Refund All Wrongful Deductions To Consumers

The Ghana Revenue Authority (GRA) has indicated that workers who receive their salaries through mobile money platforms will have E-Levy charges on them.

According to a Principal Revenue Officer and Head of the Project Management Unit at GRA, Isaac Kobina Amoako, workers should brace themselves for this, starting May 2022.

“… salaries are paid from their bank accounts onto mobile money platforms, the 1.50% fee will be deducted into the government coffers.”

The incident of the E-Levy charges on salaries paid via MoMo will be on the employer and not the employee.

Mr. Amoako explained that the controversial E-Levy is structured so that tax is factored into all revenue mobilisation streams.

In an interview with Joy News, the GRA official added that the Authority is ready to implement the E-Levy from May 1.

The official further explained that the current framework created by the law as it stands does not distinguish a corporate mobile money account and an individual mobile money account.

For the banks, the disbursements from corporate accounts were not mentioned so it is clear that one is exempt. But in the MoMo, there was no distinction between the corporate MoMo account and the individual MoMo account,” he told JoyNews.

He concluded by saying E-Levy will not be charged on salaries paid through the traditional way, i.e banks.

 

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Source: GhArticles.com

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Cedi Records 18.21% Depreciation To Dollar In Quarter 1; Ranked Among “Worst Spot Returns – Bloomberg

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Cedi and Dollar

The cedi recorded an 18.21% rate of depreciation to the US dollar in the first quarter of 2022, according to Bloomberg.

This still ranked the local currency as the worst among African currencies with the “Worst Spot Returns”. However, for the timely intervention by the Bank of Ghana, the situation could have been worse.

Despite the country benefiting immensely from the high price of crude oil on the international market and to some extent the favorable price of gold, the cedi has not fared well so far this year.

It came under severe pressure, particularly in the months of February 2022 and early March 2022. This was largely as a result of immense demand for the US dollar, as investors seek for dollar denominated assets, due to unfavorable ratings of Ghana’s economic outlook by rating agencies, Fitch and Moody’s.

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Government had also faced stiff opposition in getting some revenue bills, particularly the Electronic Transaction Levy, from getting passed. Similarly, investors wanted some reassurance by government that it was committed to narrowing the fiscal deficit, whilst reducing arrears and the rising debt.

However, the E-Levy has since been passed, whilst the government had introduced fiscal measures to revive the fiscal economy.  Coupled with the timely measures by the Bank of Ghana, this has since slowdown the rate of depreciation of the cedi against the US dollar.

THIS IS TRENDING:   Cedi Records 18.21% Depreciation To Dollar In Quarter 1; Ranked Among “Worst Spot Returns – Bloomberg

Meanwhile, the Angolan Kwanza is the best performing currency in Africa this year with an appreciation of 24% to the dollar in the first quarter of 2022.

It is followed by the South African rand with an appreciation of 9.38% to the dollar.

CURRENCIES WITH “WORST SPOT RETURNS” AT THE END OF QUARTER 1, 2022

RANKING CURRENCY YEAR-TO-DATE
16th New Sudanese pound -2.08%
17th Ethiopian Birr -3.89%
18th Liberian dollar -4.94%
19th Sierra Leone leone -5.10%
20th Mauritian rupee -7.05%
21st Zambian kwacha -8.02%
22nd Egypt pound -14.27%
23rd Ghana cedi -18.21%

CURRENCIES WITH “BEST SPOT RETURNS” AT THE END OF QUARTER 1, 2022

RANKING CURRENCY YEAR-TO-DATE
1st Angolan kwanza  24.2%
2nd South African rand  9.38%
3rd Guinean franc  4.40%
4th Botswna pula  2.59%
5th Nigerian naira 1.74%
6th Kenya shilling 1.59%
7th Rwanda franc 0.66%
8th Mozambique new metical 0.19

 

 

 

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Source: GhArticles.com

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New Sachet Water Prices Takes Effect Today

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Women selling sachet water

Sachet water price is expected to increase from today, April 1.

According to the National Association of Sachet and Packaged Water Producers (NASPAWAP), the new price of packaged water is informed by the increasing cost of raw materials and fuel and the cedi’s depreciation.

Barring any hitches, a water sachet will be selling at ¢0.40, while the 500ml bottled water will be retailed at ¢2. From Friday, iced bottled water of 750ml or medium size will be sold at ¢2.50.

A bag of sachet water, 500ml by 30pcs, will be sold at ¢6 maximum from the retail trucks.

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Mini shops, however, will retail the commodity at ¢8 per bag maximum. The 1.5L or large bottled water will be sold at ¢3.50.

President of the Asociation, Magnus Nunoo, has explained that most of the inputs and packaging materials which are mainly imported and produced from petroleum sources have seen price hikes.

“At our previous review, the dollar’s exchange rate was in the region of ¢6.50. Currently, it is inching up to ¢8.50. Fuel which forms a major cost of distributing the products to the market centres, has significantly gone up since our last review,” he noted.

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He, however, cautioned that there might be slight variations in prices across the regions due to haulage to remote and distant areas.

The president further appealed to government to review the tax policies on packaged water industry to help reduce the financial burden to save the industry.

 

 

 

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Source: GhArticles.com

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