Market analysts project continued volatility for the cedi, with the currency surpassing the GHS 17 mark against the US dollar amid heightened uncertainty surrounding the upcoming general elections.
They warn of potential sharp fluctuations, suggesting the local currency could face further upward pressure.
The Ghana cedi faced sustained pressure in October 2024, depreciating by 3.95% against the US dollar. This brings its cumulative decline since the start of the year to nearly 29%.
It is coming after the Governor of the Bank of Ghana, Dr. Ernest Addison’s statement that the cedi will soon post gains against the American greenback.
Last week, the local unit also lost 1.50% in value against the British Pound, and 0.69% against the Euro
“The problem is now when we compare the Ghana cedis to the dollar, the dollar is going upward this is making it difficult for us to purchase goods out there. I will suggest that the government will have to do something about it before we get into the Christmas”, a shop manager at Lapaz told Citi Business News, expressing frustration with the constant volatility.
Many ordinary Ghanaians are feeling the pinch, especially in areas like transportation and food prices.
With inflation already at high levels, the depreciation of the cedi only adds to the economic burden.
“We will need the government to do something about the rate, in fact it is killing us. At the end of the day we the final consumers suffer”, a buyer opined.
Despite the monetary steps to stabilize the cedi, debt restructuring efforts with external bondholders, and anticipated inflows from the next tranche of the IMF bailout, analysts contend that without structural reforms, the currency’s downward trend may persist.
“We know in economics that prices are upwardly flexible and downwardly sticky. Do not expect that the Cedi will able to recover its lost value – let’s say to about GHS 10. Unless something extraordinary happens, I don’t see that happening soon. Let’s bear in mind that risk still persists. Our elections temperature has been raised which translates into economic uncertainties”, Economist, Prof. Godfred Bopkin stated.
Source: citinewsroom.com