Cedi to hit single-digit depreciation against dollar in 2024 – EIU predicts

The Ghanaian cedi may experience a single-digit depreciation against the US dollar in 2024, as indicated in The Economist Intelligence Unit's 2024 Africa Outlook Report.

The UK-based firm attributes this potential stability to the benefits derived from the International Monetary Fund (IMF) programme.

According to the report, only five African countries—Egypt, Sudan, Ethiopia, Angola, and Zimbabwe—are projected to undergo double-digit depreciation of their currencies in 2024.

The countries in the CFA franc zone, representing Central and West African nations, are anticipated to witness currency appreciation during the same period.

The report notes that while currency depreciation against the US dollar is expected across much of Africa in 2024, the adjustments are predicted to be less severe than those recorded in 2023.

Despite this positive outlook, the Ghanaian cedi is currently trading at ¢12.18 in the retail market, with persistent pressure.

High demand from corporates and importers in anticipation of the Christmas season remains a contributing factor.

However, the imminent arrival of the first tranche of the Cocoa Syndication Loan, following parliamentary approval, may alleviate some of this pressure.

GCB Capital emphasizes that the cedi's future stability hinges on the timing of expected foreign exchange inflows from the cocoa syndication loan and the second tranche of the International Monetary Fund.

Analysts and market observers anticipate that these inflows, scheduled for the remainder of quarter 4, 2023, will play a significant role in influencing the cedi's performance for the rest of the year.