Compiled By: Prince Henry Danquah, Bora Capital Advisors Ltd.
The Ghana cedi has lost about 74% of its value against the dollar over the past 3 years, the Institute of Economic Affairs has disclosed.
The local currency depreciated by 30.0% in 2022 and 27.8% in 2023.
It has so far in 2024 lost almost 29% to the American greenback.
According to the IEA, “this is a huge depreciation by all standards”.
It added that the cedi faces further risks for the rest of the year for a number of reasons.
The first is election uncertainties that make the dollar holdings as a safe haven.
The second is uncertainties about the future of the International Monetary Fund programme in the face of the uncertain outcome of the elections and the possible intentions of the new administration, which would increase demand for dollars.
The third relates to uncerataities about debt negotiations with non-Eurobond commercial creditors, which could delay further disbursements under the IMF programme and associated inflows and, thereby, reduce FX supply in the economy.
Source: newsthemegh.com