That, he said, was attributed to the narrowing of the current account deficit which was largely driven by the improvement in the trade balance.

The improvement in the trade balance more than compensated for the moderation in the capital and financial accounts arising from lower official foreign inflows.

The trade balance improved from a deficit of $3.1 billion in 2015 to a deficit of $1.7 billion in 2016 due to increased exports receipts by 7.2 per cent and a decline in imports by 5.3 per cent.

This was in addition to the tight monetary policy stance of the Central Bank which renewed confidence in the economy.

Presenting the 2017 budget and economic statement to Parliament on Thursday, Mr Ofori-Atta said build up in the country’s gross foreign assets supported the relative stability of the cedi in 2016.

The gross foreign assets at the end of December were estimated at $6,161.80 million from $5,884.70 million at the end of December 2015, representing a build-up of $277.07 million.

This was sufficient to provide cover for 3.5 months of imports of goods and services, same as in December 2015.

BoP deficits

In 2012, Ghana’s overall balance of payments resulted in a deficit of $ 1.2 billion, reversing the surplus of US$ 546 million in 2011.

The country’s balance of payment for 2013 also recorded a deficit of $ 874.2 million which reduced to $85.2 million at the end of December, 2014, which was a significant improvement.

By the first quarter of 2016, the country’s balance of payment had recorded a deficit of $449 million but went on to record a surplus of $ 2.6 billion by the end of the last quarter which is a significant improvement 

Cedi stability

The cedi remained relatively stable against the major currencies in the currency market in 2016.

The Finance Minister attributed this to tighter monetary policy and improved foreign exchange inflows.

He said the trend was, however, reversed in the run-up to the December elections as demand pressure mounted.

As a result, he said the cedi recorded a cumulative depreciation of 9.6 per cent and 5.3 per cent against the US dollar and the euro, respectively but appreciated by 10.0 per cent against the pound sterling in the interbank market in 2016.