Fitch Solutions predicts a rebound for the Ghanaian cedi against the US dollar in the coming months, citing enhanced investor confidence, increased dollar inflows, and improving external conditions.
In its recent analysis, “Sub-Saharan Africa Currency Round-Up: Greater Stability Ahead in Second Half of 2024,” the London-based firm anticipates a favourable environment for Sub-Saharan African currencies, including the cedi.
Fitch Solutions points to emerging signs of economic recovery despite the cedi’s earlier decline of approximately 20% against the dollar this year, attributed to subdued market sentiment and debt restructuring talks. Ghana’s real GDP growth accelerated to 4.7% year-on-year in Q1 2024, bolstering demand for foreign exchange.
The agreement with international bondholders to restructure US$13 billion of external debt by September 2024 is expected to bolster investor confidence and capital inflows further, exerting upward pressure on the cedi.
Fitch Solutions forecasts a 9.0% appreciation of the cedi by year-end from its July 9, 2024, valuation, signalling optimism for Ghana’s currency amidst improving economic fundamentals.
