EIU revises 2023 cedi depreciation forecast to 23%
The Economist Intelligence Unit (EIU) has made some revisions to its projections for the depreciation of the Ghanaian cedi (GHS) against the US dollar (USD) in 2023. Initially, the EIU had forecasted a depreciation of 30.0%, but they have now revised it to a lower rate of about 23.0%. This means that they expect the cedi to weaken against the dollar, but at a slower rate than previously anticipated.
According to the EIU’s 2023 Updated African Outlook Report, this change will still position the Ghanaian cedi as the third weakest currency in Africa for the year 2023. Despite the revision, the cedi is expected to be relatively weak compared to other African currencies.
It’s worth noting that the cedi has already declined in value by a little over 22% against the US dollar according to data from the Bank of Ghana. This suggests that the depreciation of the cedi against the dollar for the remainder of the year is expected to be marginal.
The EIU also mentioned that many African currencies, including the cedi, experienced significant depreciation against the US dollar in 2022. While they expect this trend to continue in 2023, it will be to a lesser extent.
Sudan and Zimbabwe are projected to have the weakest currencies in Africa in 2023, ranking 1st and 2nd, respectively, and among the weakest in the world. On the other hand, Zambia’s kwacha is expected to be the best-performing currency in Africa for the year, appreciating against the US dollar. Burkina Faso CFA, Cameroon’s CFA, and Congolese Franc are expected to follow as the 2nd, 3rd, and 4th best-performing currencies in Africa in 2023.
