Cedi tipped to appreciate by 1.0% against dollar in 2024 – Fitch Solutions

Fitch Solutions, a UK-based credit rating agency has tipped the Ghana cedi to strengthen by roughly 1.0% to the US dollar in 2024.

This was disclosed in its latest country risk assessment on Ghana.

This will make it one of the best-performing currencies in Africa during the period.

The local currency is expected to end 2024 at a depreciation of 11.50% to the dollar on the retail market. It will consequently sell at ¢11.60 to a dollar.

According to the firm, the government will make progress regarding the restructuring of Ghana’s external debt under the G20 Common Framework by the second quarter of 2024.

This it says will boost investor sentiment towards Ghanaian assets, drive capital inflows, and provide support to the cedi.

“We forecast that the exchange rate will strengthen by roughly 1% in 2024 as we believe that the authorities will make progress regarding the restructuring of Ghana’s external debt under the G20 Common Framework”.

“Indeed, we anticipate that a deal will be reached around quarter 2 2024-quarter 3 2024, which will improve investor sentiment towards Ghanaian assets, drive capital inflows and provide support to the cedi.

The cedi shed some marginal value against the US dollar in the first week of October 2023, following increased domestic demand and the strengthening of the US dollar globally.

However, the timely announcement by the International Monetary Fund Mission Team to Ghana of a staff-level agreement reached with the government would boost investor confidence and strengthen the country’s balance of payment going forward. The deal will culminate in another $600 million inflows.

This will be far lower than the about 40% depreciation it recorded in 2023.

For the year 2022, the Ghana cedi depreciated by 30.0 percent against the US dollar, after reversals of some of the losses in December.

The Bank of Ghana pegged the depreciation of the cedi to the dollar at 22.5 percent as of September 2023.