Cedi predicted to be among Africa’s top-performing currencies in 2024
In a notable projection, Fitch Solutions has revealed that the Ghanaian cedi is poised to strengthen by approximately 1.0% against the US dollar in the year 2024.
This forecast positions the cedi as a frontrunner among Africa’s currencies during the same period, underlining its potential for resilience and stability.
Fitch Solutions attributes this positive outlook to the government’s anticipated progress in the restructuring of Ghana’s external debt, a process set to align with the G20 Common Framework.
According to the UK-based firm, this development, expected to materialize by the second or third quarter of 2024, is poised to invigorate investor confidence in Ghana’s assets, catalyze capital inflows, and provide a robust pillar of support for the cedi.
In their own words, Fitch Solutions states, “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.”
This optimistic sentiment underscores the expected tangible benefits of this restructuring initiative on Ghana’s currency and overall economic landscape.
Notably, the cedi recently experienced a marginal dip against the US dollar, driven by heightened domestic demand and the global strength of the greenback.
However, the timely announcement of a staff-level agreement between the International Monetary Fund (IMF) and the Ghanaian government has the potential to rejuvenate investor confidence and bolster the country’s balance of payments. This agreement is set to usher in an additional $600 million in capital inflows.
Looking ahead, the local currency is anticipated to conclude 2024 with a depreciation of 11.50% against the US dollar in the retail market, trading at ¢11.60 to a dollar. This projection represents a significant improvement compared to the approximately 40% depreciation witnessed in 2023, marking a promising shift in the cedi’s performance and overall economic outlook.
