Market analysts are forecasting continued volatility for the cedi, which has now surpassed GHS 17 to the US dollar amid rising concerns over the upcoming general elections.
Experts caution that the currency may face further sharp fluctuations, with potential for additional depreciation. In October 2024, the cedi fell by 3.95% against the dollar, accumulating a nearly 29% decline since the start of the year. This trend contrasts with recent statements by Bank of Ghana Governor Dr. Ernest Addison, who had expressed optimism about a potential rebound for the cedi.
Last week, the cedi also dropped 1.50% against the British Pound and 0.69% against the Euro, adding to the nation’s economic challenges. “The rising dollar makes it harder to import goods,” a shop manager in Lapaz told Citi Business News, urging swift government action, especially with the holiday season approaching.
The cedi’s depreciation is intensifying inflationary pressures, affecting essential costs like transportation and food. “The rate is killing us,” said a frustrated buyer, reflecting the concerns of consumers grappling with rising prices.
Though the Bank of Ghana has enacted measures to support the cedi, analysts argue that without structural reforms, the currency will likely remain under pressure. Support from an upcoming IMF bailout tranche and ongoing debt restructuring talks may help, but the cedi’s full recovery remains uncertain.
Economist Prof. Godfred Bopkin remarked, “In economics, prices are upwardly flexible but downwardly sticky. Don’t expect the cedi to recover to around GHS 10 anytime soon—unless something extraordinary occurs. The heightened political climate as elections approach only adds to the economic uncertainty.”