The Ghanaian cedi is forecast to remain stable against the US dollar this week, a welcome change after a period of depreciation. This positive outlook is due to two key factors:
- Improved Foreign Exchange Liquidity: The recent inflow of $360 million from the International Monetary Fund (IMF) has bolstered foreign exchange reserves in Ghana. This increased liquidity helps stabilize the currency.
- Reduced Corporate Demand: Following the IMF’s disbursement, corporate demand for US dollars has slowed down. This reduced demand puts less pressure on the cedi’s value.
Recent Measures Contributing to Stability
- IMF Funds Released: The successful completion of the second review of Ghana’s program with the IMF led to the release of $360 million, boosting forex liquidity.
- Bank of Ghana Intervention: The central bank’s sale of $19 million on the spot market further increased forex availability.
Cedi’s Performance
- Previous Volatility: The cedi had faced depreciation earlier due to consistent corporate demand for US dollars.
- First Half 2024 Performance: The cedi lost 22.45% of its value against the dollar on the retail market during the first half of 2024.
- Current Exchange Rate: As of today, the exchange rate stands at GHS 15.95 to $1 USD.
- Year-to-Date Depreciation: So far in 2024, the cedi has depreciated by 22.58% against the dollar.
Looking Ahead
While the short-term outlook appears positive, long-term stability hinges on managing corporate demand for forex and potentially increasing exports to generate more dollars.
