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 last year.
Fitch Solutions argues that this positive trend is likely to be attributed to Ghana securing an International Monetary Fund-support program 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 a formal creditors’ committee is formed and the IMF executive board approves Ghana’s program.
Currently, the cedi has lost about 14% of its value against the US dollar in the retail market, selling at around ¢12, while it has depreciated by about 21% in value to the American greenback on the interbank forex market, going for around ¢10.95.
Although the Central Bank has increased its intervention in the spot market to meet the high demand for foreign exchange due to market uncertainties, the cedi has had mixed performance over the past two weeks.
Last week, it lost 1.03% week-on-week against the dollar, closing at a mid-rate of ¢12.10 to one US dollar, and also experienced a loss of 1.34% against the pound and 0.96% against the euro.