Analysts are still anticipating further gains of the cedi should Ghana secure board approval from the International Monetary Fund (IMF), as expected.
There have been strong predictions that Ghana’s currency will see more strengthening on the forex market as the country prepares for the first loan tranche of US$600m from the IMF in the next couple of days.
Bloomberg has reported that the cedi strengthened by 5.3% on May 15, 2023, the most since April 3, 2023.
Currently, the cedi is trading at about GHS 11 to a dollar. But industry watchers say the impending balance of payment support from the IMF will positively impact the cedi.
Speaking to Citi Business News, currency analyst and Reasearch Lead at GCB Capital said, Ghana is on course to see some market stability.
“The appreciation of the cedi has already started except that it is a momentum that I believe is continuing. My expectation is that this news could even deepen it and that concern of reserve vulnerability will ease a bit. The start of the program also eases investor concern and uncertainty in the economy. These are some of the things that will ensure that the cedi regains its lost value.”
Fitch Solutions has predicted that the Ghana cedi will end 2023 at a rate of ¢12.40 to one US dollar, which is a significant improvement from the 38% depreciation recorded in 2021.
Fitch Solutions argues that this positive trend is likely to be attributed to Ghana securing an International Monetary Fund-support programme by May 2023, which will help cushion the cedi against foreign exchange pressures.
Despite short-term exchange rate volatility, Fitch Solutions believes that the cedi will eventually stabilize once the IMF executive board approves Ghana’s programme.
“Once IMF as a trusted partner comes in with the help of the authorities, the expectation is that the buffers will improve gradually. I believe these are the things that will help the cedi appreciate a bit. This is positive news and I believe that we will see some corrections in the next few weeks or months until some stability is restored”, Courage Boti added.
