The Ghana cedi continued its rally against the US dollar and the other major foreign currencies yesterday, December 13, 2022, following the announcement of the Staff-Level Agreement between the International Monetary Fund (IMF) and the government.
The local currency sold below ¢12 to the dollar in the forex market and may hit the ¢10 mark anytime soon.
Analysts believe confidence within the economy is soaring and that will trigger further gains in the cedi to the major foreign currencies.
The strong improvement in the cedi in recent times is also expected to trigger a reduction in fuel prices, beginning this Friday, December 16, 2022. The Institute for Energy Security (IES) is predicting a significant fall in fuel prices because of about 6.6% appreciation in the value of the cedi to the dollar.
Before the expected announcement of the IMF Staff-Level agreement, the local currency had been improving in value against the dollar and the other major foreign currencies.
Investor confidence in the foreign exchange market had soared supporting the cedi’s rally against the US dollar and the other major foreign currencies.
This trend many analysts believe will continue because of expected foreign inflows in the coming months.
A similar situation occurred in Zambia where the kwacha strengthened in value against the dollar, following an announcement of an IMF programme in August 2022.
The kwacha then went ahead to become the best-performing currency in Africa so far this year, appreciating in value by over 0.70% (December 13, 2022) against the US dollar.