An analyst with the Sub Sahara African Department at Fitch Solutions, Ben Weaver said the outlook for the Ghana Cedi is somewhat promising despite a persistent depreciation of the currency in the first three months of 2022.
“Our outlook for the cedi, I think we’ve seen quite a lot of weakening in the first few months of this year. But we expect modest appreciation to kind of continue in the coming months and to the end of the year as much of the weakening has already happened,” he is quoted by Joy Business.
“But this will of course increase inflationary pressures. But we don’t expect inflation to accelerate too much high the way it is. Ghana’s inflation rate accelerated quite aggressively and this is due to rising gold price due to the weakening of the cedi,” Mr Weaver added.
Meanwhile, the Ghana Cedi began the first three months of this year significantly depreciating against major trading currencies especially the US dollar - making it the worst performing currency on the African continent during the period.
To mitigate this, the Bank of Ghana reviewed its monetary policy rate upwards to 17 percent from an initial 14.5 percent.
In addition to the measures, the central bank further increased the cash reserve to 12 percent for commercial banks operating in the country.
It also reset the Capital Conservation Buffer to pre-pandemic level of 3 percent and pegged the Capital Adequacy Ratio to a total of 13 percent.
The Ghana cedi is currently selling at GH¢7.45 to the US dollar on the forex market.
The Ghana cedi has been struggling against US dollar in the first three months of 2022
