Market analysts are projecting continued volatility for the cedi, which has now surpassed GHS 17 against the US dollar amid uncertainty surrounding the upcoming general elections.
They warn of potential sharp fluctuations, with the local currency facing further upward pressure.
In October 2024, the cedi depreciated by 3.95% against the dollar, marking a cumulative decline of nearly 29% since the beginning of the year.
This contrasts with recent remarks by Bank of Ghana Governor Dr Ernest Addison, who expressed confidence that the cedi would soon gain ground against the dollar.
Last week, the cedi also weakened by 1.50% against the British Pound and 0.69% against the Euro, adding to economic strain.
“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 adding to inflationary pressures, affecting everyday costs like transportation and food. “The rate is killing us,” lamented a buyer, expressing frustration with the impact on consumers.
While the Bank of Ghana has implemented measures to stabilize the cedi, analysts argue that without structural reforms, pressures on the currency are likely to persist, even with potential support from the next IMF bailout tranche and 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 .
