The Ghanaian cedi is expected to stabilize by mid-2024, according to market analysts at GCB Capital. This optimistic forecast comes despite the currency’s rapid depreciation since February, primarily driven by corporate forex demand pressures.
Ghana’s improving macroeconomic environment, marked by a projected increase in GDP growth from 2.9% in 2023 to 3.3% by the end of 2024, is a key factor in the cedi’s anticipated recovery. Additionally, average inflation is expected to decrease from 38% to 18% over the same period, further supporting the currency’s stabilization.
In a bid to bolster the cedi, the Central Bank has taken decisive action, selling $13 million in the spot market and $20 million to Bulk Oil Distribution Companies (BDCs) in the 51st auction. While the cedi still experienced depreciation against major trading currencies in the first quarter of 2024, the rate was significantly lower than in previous years.
Lead researcher at GCB Capital, Courage Boti, attributes the optimism to the improving macroeconomic environment and potential increased forex demand absorption from the Bank of Ghana’s auctions. He noted that the corporate sector, particularly BDCs, are driving forex demand, and seasonal trends like dividends repatriation in the second quarter will also impact the cedi’s stability.
