Market analysts are predicting ongoing volatility for the cedi, which recently surpassed GHS 17 against the US dollar amid uncertainty surrounding the upcoming general elections.
They caution that the local currency may experience sharp fluctuations and face additional upward pressure.
In October 2024, the cedi depreciated by 3.95% against the dollar, bringing its total loss for the year to nearly 29%. This trend contrasts with recent statements by Bank of Ghana Governor Dr. Ernest Addison, who expressed optimism that the cedi could soon strengthen against the dollar.
Last week, the cedi also fell by 1.50% against the British Pound and 0.69% against the Euro, intensifying economic challenges.
The cedi’s depreciation is fueling inflation, impacting daily expenses such as transportation and food.
While the Bank of Ghana has introduced measures to stabilize the currency, analysts argue that without structural reforms, pressure on the cedi is likely to persist, even with prospective support from the next IMF bailout tranche and ongoing debt restructuring negotiations with external bondholders.
“We know in economics that prices are upwardly flexible and downwardly sticky. Don’t expect the cedi to recover to around GHS 10 unless something extraordinary happens,” cautioned economist Prof. Godfred Bopkin.
“The election climate heightens economic uncertainties, keeping risks high,” he added.
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