Cedi to continue good run against dollar; gained almost 9% last week
The Ghana cedi is expected to continue its good run against the US dollar and the other major currencies on the retail market this week.
This is a forecast by many research institutions including GCB Capital, Databank Research and Republic Securities.
The cedi gained about 9% in value to the American greenback last week to sell at ¢11.00 on the retail market, following the Executive Board of the International Monetary Fund’s approval of the Fund-support programme.
This ranked the local currency as the world’s top performer after narrowing its year-to-date loss on the retail market to about 7%.
Analysts expect the anticipated foreign exchange inflows from the IMF deal to shore up Ghana’s foreign reserves and strengthen the cedi.
However, they expressed concern about the decline of Ghana’s import cover by 35% as of April 2023.
Similarly, Ghana’s Balance of Payment financing gap throughout the IMF-support programme is estimated at about $15 billion, with the $3 billion package making up 20% of the total needs.
The programme envisages additional funding from the World Bank, African Development Bank and other bilateral partners.
Therefore, the exchange rate outlook hinges on the timeframe for completing the external debt operation and successful bi-annual reviews under the programme.
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