However, the local currency was classified among the currencies with the ‘worst spot returns’.
According to Bloomberg, the cedi lost 4.98% in value against the US dollar in 2021, although data from other research institutions show a slightly lower decline in value of the local currency to the American currency.
However, in West Africa, the cedi placed 3rd in terms of performance.
Amalgamation of factors including increased corporate demand for the US dollar and the exit of the country’s bond by some foreign investors put pressure on the local currency in the last two months of the year.
Again, importation of goods during the final part of 2021 by traders to sell during the Christmas period, increased demand for the American currency.
Despite a rebound in oil prices, improved exports, amongst others, the dollar inflows were not enough to stabilise the local currency.
Analysts are however uncertain about the outlook of the local currency, going forward.
Meanwhile, on the African continent, the Zambian Kwacha was the best performing currency last year. It was followed by the Angolan Kwanza and Mozambique New Metical.
CURRENCIES WITH ‘BEST SPOT RETURNS’
|Mozambique New Metical||16.76%||3rd|
CURRENCIES WITH ‘WORST SPOT RETURNS’
|South African Rand||-7.72%||18th|
|Sierra Leone Leone||-9.98%||19th|