Cedi to dollar rate projected to end at ¢15.91 to $1 in 2024
According to experts, the cedi-dollar exchange rate is expected to worsen by the end of 2024. IC Securities, a research firm, has updated its end-2024 US dollar-Ghana cedi exchange from GH¢13.2/US$ to GH¢15.91/US$. It stated that this is predicated on the present macroeconomic climate.
“Following the unexpected cut in the policy rate [by the Bank of Ghana] in January 2024, we indicated our deferred inclination to raise our forecast for the US dollar Ghana cedi FX [foreign exchange] rate as we foresaw intense selling pressure on the local currency.
Our decision to delay the revision to our forecast until mid-year was anchored on expected programme-related inflows and the final tranche of the cocoa syndicated loan for the 23/24 season.” IC Securities explained
“But because the market was oversupplied with GHS (Ghana cedi), these inflows did not fully materialise. Local currency liquidity was somewhat constrained by the ensuing change to banks’ CRRs (Cash Reserve Requirement), as most banks changed their maturing BoG assets into CRR positions.
Furthermore, IC Securities added, “the apparent fiscal expansion through the clearing of contractor arrears continued to propagate GHS [cedi] liquidity in the forex market with a consequent pressure on the local currency.”
According to MyJoyonline, ICC further stated that the projected inflow of roughly $2.3 billion for the remaining months of 2024 seems mostly achievable because the suggested dates lend some validity to its projections.
According to the report, the World Bank’s inflows will have a greater signalling effect on the cedi than actual foreign exchange sales because the Bank of Ghana will continue to execute limited interventions while building reserves.
“Although these inflows may cause a brief decline, as the December elections draw near, we anticipate that local investors will continue to hedge, which may counteract any gains brought on by the inflows. As a result, we increase our prediction for the US$/GHS rate by end-2024 to GH 15.91/US$. Currently, the local currency is valued at roughly GH¢15.00 to the US dollar at the forex bureaus.
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