Audio By Carbonatix
Professional services firm, Deloitte, is predicting a slowdown in the depreciation of the cedi to continue for the rest of the year.
This is primarily due to the expected inflows of forex from the International Monetary Fund (IMF) programme and the World Bank Development Policy Operation (DPO) funding.
The Economist Intelligence Unit also noted that the relative slowdown in depreciation can be largely attributed to improved foreign-exchange liquidity and a strong and growing current-account surplus.
However, Deloitte warned that the declining cocoa production is a major risk to exchange rate stability.
It therefore wants the government to address the declining cocoa production to help boost the country’s forex reserves and reduce the foreign exchange demand pressure.
“Whilst we acknowledge the various policy interventions intended to mitigate our FX risks (i.e. streamlining gold sales through the GoldBod, intensifying forward FX [foreign exchange] auction, reducing public spending and budget deficit, and prioritising import substitution), we have identified the declining cocoa production as a major issue that must be addressed to also help in boosting our forex reserves and reducing the FX demand pressure”.
In 2024, the Ghana cedi lost about 19% in value to the US dollar. It also depreciated by 17.80% to the pound and 13.70% to the euro.
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