The Ghanaian cedi is expected to recover some of its losses against the US dollar in the coming months, as disclosed by Fitch Solutions.
The London-based firm attributes this potential improvement to enhanced investor confidence, increased dollar inflows, and a more favorable external environment.
Fitch Solutions anticipates greater stability for Sub-Saharan African currencies overall in the second half of 2024.
Despite the cedi’s recent challenges, including a 20% depreciation against the dollar this year, factors such as an economic recovery and ongoing debt restructuring efforts are likely to bolster its performance.
Fitch Solutions projects a 9.0% appreciation in the cedi by the end of the year, with recent agreements on debt restructuring expected to further stabilize the currency.
Ghana’s international reserves, though low, are being managed under IMF agreements to allow for market-driven adjustments in the exchange rate.
The restructuring of US$13 billion in external debt, slated for completion by September 2024, is also anticipated to support economic stability and currency strength moving forward.
Fitch Solutions stated that the restructuring of Ghana’s debt will likely boost investor confidence in the country, increase capital inflows, and exert upward pressure on the value of the cedi.
This positive outlook reflects expectations that the debt restructuring agreement will contribute to stabilizing Ghana’s economic environment and support the currency’s performance against major currencies like the US dollar.
