Ghana's currency the cedi which depreciated by about 18.75 per cent against the US dollar in 2015 is expected to depreciate by about 15 percent this year.

This means the cedi which has been battling instability against the American currency almost every year will sell at about GH¢4.50 to the world’s most important currency by December 31, 2016.

According to investment firm, Investcorp, unstable economic fundamentals, high imports and fiscal imbalances are expected to have some effect on the cedi.

The local currency lost value by about 1.7 percent to the US dollar in January 2016 but has so far depreciated by about 3 percent, trading at about GH¢4.05.

The cedi placed 14th in terms of performance out of 25 currencies captured by Ecobank Research in 2015. They included the South African rand, Angola kwanza, Zambia kwacha, Namibia dollar and Tanzania shilling. `

Investcorp is also predicting that the nation’s 91-day Treasury bill is expected to end the year 2016 at a yield of 24.0 percent.

Interestingly, the interest on the short term security fell slightly to 22.60 percent from 22.67 percent at the last sale. It hovered around 25.83 percent last year.

However, with government on a borrowing spree, many analysts and market watchers are unsure whether the yield on the T. bill will indeed end 2016 at a rate of 24 percent.

Government borrowed GH¢781.918 million on the domestic market alone between December 2015 and January 2016.

The research firm in its economic outlook report also said government’s focus in 2016 should be directed towards holding down business cost which requires that inflation quickly settles on a downward path, while interest rates re-align to support cheaper credit to the private sector.

“We think interest rate increases will be ineffective this year, and that there is limited scope for any further credit squeeze in the economy. On that basis, we believe Ghana’s monetary policy stance should lean towards a rate neutral positioning for most part of this year; unless it is increased to accommodate currency depreciation.”

It added that “overall, we view the normalizing factors in 2016 to include the need for a stable or lower interest rate, year-to-date exchange rate depreciation within the region of 14 and 15 percent, and a fiscal deficit to GDP ratio in line with budgetary target.”