The Economist Intelligence Unit (EIU) predicts the cedi will depreciate by 30% against the dollar by 2023.
However, this is lower than the local currency’s devaluation of about 44% in 2022. Revealing this in its 2023 Ghana Country Report, the UK-based company said it expects the cedi to depreciate significantly this year.
“We currently think the currency will weaken to ¢12.46:US$1 by the end of 2023 (from ¢10.95:US$1 in mid-April).” He added that the devaluation of the cedi will be driven by increased demand for strong foreign currencies due to high import prices, inflation, capital flight, increased repatriation profits of multinationals based in Ghana and weak investor sentiment in the face of the ongoing debt crisis.
However, it is expected that the Governing Council will approve the International Monetary Fund’s program by mid-2023, and sustained monetary and fiscal tightening will help slow the cedi’s decline from the second half of the year He added. “we expect the rate to continue to decline gradually over the period 2024-27, to ¢14.70:US$1 by the end of 2027, but at a much slower rate than in 2022. -2023 due to uncertainties related to the gradually decreasing debt restructuring, structural current account deficit and higher inflation than its trading counterparts.
It concluded that the reserves would meet an average of 3.3 months of imports for the period 2023-2027, well above the internationally recognized conservative minimum of three months. The cedi began trading on May 2, 2023 at ¢12.1 pesewas per dollar in the forex or retail markets.
It also sells for ¢14.9 for the pound and ¢13.00 for the euro. So far (April 28, 20223), the cedi has depreciated about 17% against the US dollar in the retail market and 21.69% in the interbank foreign exchange market.
