International research firm, Fitch Solutions, is forecasting a slower depreciation of the cedi to the dollar next year.
It expects the cedi to lose just about 3.1% of its value against the dollar in 2021, unless something untoward happens.
Its argument is that the nation’s exports are expected to recover strongly next year on the back of higher international oil prices, improve cocoa exports and continued strength in gold shipments. So far, the cedi has lost about 3.1% in value to the dollar.
“We expect the cedi to lose just 3.1% of its value against the dollar over the year on average. Ghana’s exports are expected to recover strongly in 2021 on the back of higher international oil prices, recovering cocoa exports and continued strength in gold shipments. However, imports will also rebound due to rising household consumption and business investment”, it emphasized.
Senior Research Analyst at Databank, Courage Martey also said the cedi will end the year strongly against the dollar despite the elections uncertainties.
“The cedi performance is still generally strong and I would say very impressive year-to-date. It’s done just about 3.1 percent against the US dollar; this compares favourably with last year same period when we lost over 9.0%. So, I would say that so far it’s still doing quite good within the uncertainty around, it’s still being impressive. The cedi will remain considerably stable until year-end despite the domestic and external elections uncertainty,” he said.
Reasons behind strong cedi in 2020
Many analysts have attributed the strong performance of the cedi to the Bank of Ghana’s bi-weekly Foreign Forward Auctions and Spot Market interventions, which is supported by healthy secondary reserves, equivalent to about 4.3 months of imports.
Also, the relative mild value of the dollar to some global currencies on the external front, amid rise in covid-19 pandemic has benefited the cedi.
Historical performance of the cedi to dollar
2019 12.9% depreciation
2018 8.4% depreciation
2017 4.9% depreciation
2016 9.6% depreciation
2015 18.75% depreciation
Latest Stories
-
Girl, 8, only survivor as 45 killed in bus crash in South Africa
29 mins -
Biden to host star-studded NYC fundraiser with Obama and Clinton
34 mins -
GDNR, AAU and others launch Universal Acceptance for local languages in internet domain names
60 mins -
Ogum and Kotoko’s March malaise
3 hours -
2 repair vessels dispatched for undersea cable repairs – says NCA’s latest update
3 hours -
Multimedia Group Limited’s Clinton Yeboah shortlisted for 2 International Sports Press Association Awards
3 hours -
Supreme Court upholds High Court verdict on fraudulent sale of property by Senior Police Officer
4 hours -
NHIS Biometric Membership Authentication System limited rollout satisfactory – NHIA Deputy CEO
4 hours -
Yara Ghana donates 1,107 bags of fertilizers to women farmers, farmers with disabilities
4 hours -
Tinubu forms team to find solutions to ailing economy
4 hours -
Jacob Zuma barred from running in South Africa election
4 hours -
Western Cape Education wins national primary school track and field championships
5 hours -
Cyber Security Authority issues Public Alert over Easter and Eid al-Fitr season scams
5 hours -
Sandro Tonali charged by FA for alleged betting rules breaches after joining Newcastle
5 hours -
Scancom PLC holds 6th AGM, declares dividend of 17.5 pesewas per share
5 hours