By Market analysts are forecasting continued volatility for the cedi, which has now exceeded GHS 17 against the US dollar amid growing uncertainty surrounding the upcoming general elections.
They caution that sharp fluctuations are likely, with the local currency facing additional upward pressure.
In October 2024, the cedi depreciated by 3.95% against the dollar, contributing to a cumulative decline of nearly 29% since the start of the year.
This comes in contrast to recent statements by Bank of Ghana Governor Dr. Ernest Addison, who expressed confidence that the cedi would soon regain strength against the dollar.
Last week, the cedi also weakened by 1.50% against the British Pound and 0.69% against the Euro, further intensifying economic pressure.
“The dollar is rising, making it harder to buy goods abroad,” a shop manager at Lapaz told Citi Business News, calling on the government to act quickly, especially as Christmas approaches.
The cedi’s depreciation is exacerbating inflationary pressures, driving up everyday costs such as transportation and food. “The rate is killing us,” lamented a buyer, voicing frustration over the impact on consumers.
Although the Bank of Ghana has introduced measures to stabilize the cedi, analysts argue that without significant structural reforms, the currency pressures are likely to persist.
This is true even with potential 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. Do not expect that the Cedi will be able to recover its lost value – let’s say about GHS 10. Unless something extraordinary happens, I don’t see that happening soon.
“Let’s bear in mind that the risk still persists. Our elections temperature has been raised which translates into economic uncertainties”, Economist, Prof. Godfred Bopkin stated .
