International Journal of Economics, Finance and Management Sciences

Submit a Manuscript

Publishing with us to make your research visible to the widest possible audience.

Propose a Special Issue

Building a community of authors and readers to discuss the latest research and develop new ideas.

Research Article |

The Dynamics of the Ghanaian Currency Depreciation: A Case Analysis of the Performance of Ghana Cedi (GHC) Against Its Major Trading Currencies

Depreciation is a currency's exchange rate falling against other currencies. Economic fundamentals, interest rate differentials, political instability, or investor risk aversion can cause currency devaluation. Countries with weak economic fundamentals, such persistent current account deficits and excessive inflation, have declining currencies. Orderly and progressive currency depreciation increases export competitiveness and may reduce trade imbalance. Ghana imports and exports raw commodities. Ghana needs foreign currency but has a limited supply. The cedi depreciates against major currencies occasionally. In this study, the researchers assessed the performance of the Ghana cedi relative to major foreign currencies such as the U. S. Dollar, the British Pound, the Chinese Yuan, and the Japanese Yen. The following particular goals will be evaluated: This study's population will consist of all business owners in the central region of Accra. A simple random sample of fifty (50) individuals and firms that deal in foreign currencies was conducted. The study revealed a positive relationship between the US Dollar, British pound, Japanese yen, Chinese yuan, and Ghanaian cedi. The link between the US Dollar and the Great British Pound appears to be the strongest, with the Chinese Yuan being the weakest. This indicates that the Ghanaian cedi is unaffected by fluctuations in the US Dollar and British Pound. It was discovered that the Ghana cedi declined continuously versus other international currencies from 2016 to 2022. In 2022, the Ghana Cedi lost approximately 40.05 percent of its value against the US dollar, 21 percent against the British pound, 23.55 percent against the Japanese yen, and 34.98% against the Chinese yuan. The analysis advised that the Bank of Ghana enforce the prohibition on commodity pricing in other foreign currencies.

Redenomination, Ghana Cedi, Devaluation, Ghanaian Currency Depreciation, Major Trading Currencies, Foreign Exchange Rate, USD, GBP, CNY, JPY

APA Style

Zubairu, I., Alenezi, M., Iddrisu, A. J., Dawson, S. (2024). The Dynamics of the Ghanaian Currency Depreciation: A Case Analysis of the Performance of Ghana Cedi (GHC) Against Its Major Trading Currencies. International Journal of Economics, Finance and Management Sciences, 12(1), 18-43.

ACS Style

Zubairu, I.; Alenezi, M.; Iddrisu, A. J.; Dawson, S. The Dynamics of the Ghanaian Currency Depreciation: A Case Analysis of the Performance of Ghana Cedi (GHC) Against Its Major Trading Currencies. Int. J. Econ. Finance Manag. Sci. 2024, 12(1), 18-43. doi: 10.11648/ijefm.20241201.13

AMA Style

Zubairu I, Alenezi M, Iddrisu AJ, Dawson S. The Dynamics of the Ghanaian Currency Depreciation: A Case Analysis of the Performance of Ghana Cedi (GHC) Against Its Major Trading Currencies. Int J Econ Finance Manag Sci. 2024;12(1):18-43. doi: 10.11648/ijefm.20241201.13

Copyright © 2023 Authors retain the copyright of this article.
This article is an open access article distributed under the Creative Commons Attribution License ( which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

1. Abdul-Mumuni, A. (2016). Exchange rate variability and manufacturing sector performance in Ghana: evidence from cointegration analysis. International Economics and Business. 2(1), 1–14.
2. Acheampong, K. (2004). The pass-through from exchange rate to domestic prices in Ghana. Bank of Ghana Working Paper No. 05/14, Bank of Ghana, Accra Ghana.
3. Adubi A. A., & Okunmadewa F. (1999). Price, exchange rate volatility and Nigeria’s agricultural trade flows: A dynamic analysis. African Economic Research Consortium: Research Paper. 87.
4. Alagidede P, & Ibrahim, M. (2016). On the causes of effects of exchange rate volatility on economic growth: Evidence from Ghana. International Growth Centre: Working Paper.
5. Amoah E, Nyarko E, & Asare K. (2015). FDI, inflation, exchange rate and growth in Ghana: Evidence from causality and cointegrated analysis. European Scientific Journal. 11(31), 294–304.
6. Antwi S., Atta Mills E., Atta Mills G. & Zhao X. (2013). Impact of Foreign Direct Investment on Economic Growth: Empirical Evidence from Ghana. International Journal of Academic Research in Accounting, Finance and Management Sciences. Vol 3 (1), pp8-25. ISSN 2225-8329
7. Arthur, W. (2011). The causes and effects of this regime of depreciating value of the Cedi and suggest measures that could be put in place to help stabilize the Economy.
8. Aryeetey, E., & Kaubur, R. (2011). The economy of Ghana: Analytical Perspective on Stability, Growth and Poverty. Woeli Publishing Service, Accra.
9. Asuming-Brempong S. (1998). Ghana: Exchange Rate Reforms and Real Exchange Rate. AgEcon Search, Research in Agricultural and Applied Economics. Published Master’s Thesis, Michigan State University, USA.
10. Bank of Ghana (2022). Historical interbank FX rates. Retrieved from
11. Bank of Ghana monetary policy report. (2016). Ghana monetary policy. Retrieved from
12. Bhutt S. K., ur Rehman M. & ur Rehman S. (2005). Analysis of Exchange Rate Fluctuations: A Study of PKR Vs. USD. Journal of Management Sciences, Vol. VIII (1).
13. Breitung J. (2001). Rank Test of Nonlinear Cointegration. Journal of Business and Economic Statistics. Vol. 9 (3), pages 331-340. American Statistical Association.
14. Brownbridge A., Gockel, F. & Harrington, R. (2000). Saving and investment. In Aryeetey et al. 2000. 132–151.
15. Chen, J., Scott, G. & Kvilhaug, S. (2022). Exchange rate definition. Retrieved from
16. Chhibber, A., & Shafik, N. (1990). Exchange reform, parallel markets and inflation in Africa: The case of Ghana. World Bank Working Papers. WPS 427.
17. Chinchalkar, A. (2022). History shows Ghana’s cedi may weaken further from record low. Retrieved from
18. David, C. Colander. (2007). Macroeconomics (3rd Edition). Irwin McGraw Hill Companies
19. De Vaus, D. A. (2006). Research Design in Social Research. London: SAGE, 2001; Trochim, William M. K. Research Methods Knowledge Base.
20. Edem, A. (2017). The Effects of Exchange Rates on Trade Balance in Ghana. Kwame Nkrumah University of Science and Technology. Kumasi
21. Egwaikhide, F. O., Chete, L. N., & Falokun, G. O. (1994). Exchange rate depreciation, budget deficit and inflation the Nigeria experience. African Economic Research Consortium. Research Paper 26.
22. Harrigan, J., & Oduro, A. (2000). Exchange Rate Policy and the Balance of Payments. Journal of Population Economics, 28, 1432-1475.
23. Institute of Statistical, Social and Economic Research (ISSER), University of Ghana, Legon- Ghana. (2009). The State of the Ghanaian Economy in 2008.
24. Iossifov P, Loukoianova F. (2007). Estimation of a behavioral equilibrium exchange rate model for Ghana. IMF Working Paper. WP/07/155. Washington, D. C.
25. Jebuni, C. D., Sowa, N. K, & Tutu, K. A. (1991). Exchange rate policy and macroeconomic performance in Ghana. African Economic Research Consortium, Research Paper 6.
26. Jebuni, S. & Tutu, (1991). One cedi also exchanged for 1.1660 United States dollars.
27. Kabir, S. M. S. (2016). Basic Guidelines for research: An Introductory approach for all disciplines. Book Zone Publication, ISBN: 978-984-33-9565-8, Chittagong-4203, Bangladesh.
28. Kibuacha, F. (2021). Sample size for a research study. Retrieved from
29. Kidane, A. (1997). Exchange rate policy and economic reform in Ethiopia. African Economic Research Consortium. Research Paper 54.
30. Killick, T. (2010) Development and Economics in Action: A Study of Economic Policies in Ghana. 2nd Edition, Routledge, London and New York, 234-287.
31. Kojo, E. (2022). Ghana cedi ranked 2nd worst among 15 top-performing currencies in Africa. Retrieved from
32. Kraev E. (2004). Policy summary of “Structural adjustment policies in Ghana in the 1990s-An empirical analysis and policy recommendations. Integrated Social Development Center, Accra, Ghana and School of Public Policy University of Maryland, College Park, USA; 2004
33. Kwakye, J. K. (2012). Determination of real exchange rate misalignment for Ghana. The Institute of Economic Affairs. No. 31 IEA Monograph.
34. Lucy, A. & Sunday, R. J. (2015). Pacific YKT. Exchange rate and trade balance in Ghana: Testing the validity of the Marshall Lerner condition. International Journal of Development and Emerging Economics. 3(2): 38–52.
35. Maehle N. O., Teferra H. & Khachatryab A. (2013). Exchange Rate Liberalization in Selected Sub-Saharan African Countries; Success. Failures and Lessons. IMF Working Paper WP/13/32.
36. Martin, J. (2022). Cedi now worst among Africa’s top currencies. Retrieved from
37. Mensah D. L. (2009). Capital Market Liberalization to Foreigners in Ghana. Working Paper WP28/09. Ministry Finance and Economic Planning, Accra Ghana
38. Mensah, M., Awunyo-Vitor, D., & Asare-Menako H. (2013). Exchange rate volatility and employment growth in Ghana’s manufacturing sector. International Journal of Business and Social Science. 2013; 4(4), 225–232.
39. Mhango Y. (2010). Economics, Ghana: Annual economic outlook the eve of oil production. Standard Bank.
40. Mirchandani, A. (2013). Analysis of Macroeconomic Determinants of Exchange Rate Volatility in India. International Journal of Finance & Economics, 3, 172-179.
41. Mishra S. (2013) Empirical analysis of rupee fluctuations against US Dollar in post liberalization period in India. International Journal of Research in Engineering, IT and Social Science. 4(7),10–22.
42. Mumuni, Z. and Owusu-Afriyie, E. (2004) Determinants of the Cedi/Dollar Rate of Exchange in Ghana: A Monetary Approach. A Bank of Ghana Working Paper: WP/BOG-2004/06.
43. Obi, B., Abayomi, A., Ogwuche, D. (2016), Oil price shock and macroeconomic performance in Nigeria. Journal of Economics and Sustainable Development, 7(24), 137
44. Rockvile, S. (2011). Real causes of currency depreciation. Retrieved from
45. Sackey, H. A. (2001) External Aid Inflows and the Real Exchange Rate in Ghana African Economic Research Consortium.
46. Saeed, A., Awan, R. U., Sial, M. H., & Sher, F. (2012). An econometric analysis of determinants of exchange rate in Pakistan. International Journal of Business and Social Science. 3(6), 184–196
47. Sikhakhane, J. (2021). Ghana’s Cedi is under stress: some long, medium, and short-term solutions. Retrieved from
48. Smith, T., Boyle, M. J., & Jasperson H. D. (2021). Currency depreciation. Retrieved from
49. Su C. (2012). The relationship between exchange rate and macroeconomic variables in China. Zb. Rad. Ekon. Fak. Rij. 30(1): 33–55.
50. Trading Economics (2022). Ghana Cedi, Inflation and Trends Analysis. Trading economics application programming interface;
51. Yeboah K. (2016). Causes and Effects of Current Cedi Depreciation and Suggested Measures to Curb It.; Tantra Hills, Accra.