Fitch Solutions Predicts Ghanaian Cedi Will Rebound
Fitch Solutions, a leading rating agency, forecasts that the Ghanaian cedi will recover and appreciate in value soon.
The cedi is expected to regain some of its recent losses and end the year at a stronger exchange rate of USD 12.25. This positive outlook follows a challenging period where the cedi depreciated by 11% against the US dollar, making it one of the worst-performing currencies globally.
Fitch Solutions, a leading international rating agency, has issued a positive forecast for the Ghanaian cedi, predicting a robust recovery and appreciation in the near future. This optimistic outlook is largely attributed to the significant progress made by the government in restructuring its commercial debt, which is expected to have a positive ripple effect on the economy.
The successful debt restructuring efforts are anticipated to bolster investor confidence in Ghana’s economic policies and governance, leading to an influx of foreign exchange inflows and a consequent strengthening of the cedi in the second half of 2024. This development is expected to reverse the currency’s recent depreciation, which has seen it lose 11% of its value against the US dollar so far this year, making it one of the worst-performing currencies globally.
The cedi’s depreciation has been further exacerbated by dwindling foreign exchange reserves, resulting in low import cover. However, Fitch Solutions expects the currency to recoup some of its recent losses in the coming months, with a projected year-end exchange rate of USD 12.25.
This positive outlook is a welcome respite for Ghana’s economy, which has been grappling with currency volatility and macroeconomic challenges. The expected recovery of the cedi is poised to boost economic growth, improve trade balances, and enhance the overall business environment, making Ghana an attractive investment destination once again.
