We expect marginal depreciation of cedi going into festive season – Association of Forex Bureaux

The Ghana Association of Forex Bureaux is predicting a marginal depreciation of the cedi against the US dollar going into the festive season.

The local currency has come under some pressure in recent times despite recording relative stability for the greater part of the year.

Even though Fitch Solutions projected the cedi to end 2023 at 11. 40 to a dollar, the Ghana Association of Forex Bureau believes an increase in the demand for the dollar coupled with high imports may force the cedi to lose some value against the dollar

“Yes, you must know that during the festive season, there will be a lot of demand for foreign currency especially the US dollar because most of our imports are dollar denominated. And so you would expect that the dollar and for the matter the rate of the dollar compared to the cedi will depreciate.”

“The depreciation would be small I can tell you”, he added.

Dr Alex Akpabli however called for the regulation of imports going forward to reduce the pressure on the local currency.

“We just need to find ways to deal with the high importation of goods in the country. The Ghana cedi is doing well and we can do better if we work around all indicators”, he mentioned.

Cedi to strengthen 1.0% to the dollar in 2024

According to Fitch Solutions, the cedi is expected to strengthen by roughly 1.0% to the US dollar in 2024.

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

According to the UK-based 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.