Research firm, IC Securities, has predicted that the Ghanaian Cedi will reach GH¢15.91 to US$1 by the end of the year.

The revision from the initial forecast — a dollar to cedi rate at GH¢13.2 — IC Securities said was due to current macroeconomic factors.

The firm noted that the Bank of Ghana's adjustment to the Cash Reserve Requirement (CRR) had a limited impact on reducing local currency liquidity, as banks converted their maturing securities into CRR positions.

IC Securities also stated that the clearance of contractor arrears contributed to an increased supply of Cedis in the forex market, putting further pressure on the currency.

The firm remarked, "Following the unexpected cut in the policy rate by the Bank of Ghana in January 2024, we indicated our deferred inclination to raise our forecast for the US dollar-Ghana cedi FX (foreign exchange) rate as we foresaw strong selling pressure on the local currency. Our decision to delay the revision of our forecast until mid-year was based on expected program-related inflows and the final tranche of the cocoa syndicated loan for the 2023/24 season."

"While these inflows could trigger a short-term retracement, we anticipate continued hedging by domestic investors as we approach the December elections, which will likely offset any inflow-induced appreciation. Consequently, we have raised our forecast for the end-2024 US$/GHS rate to GH¢15.91/US$1," the research firm explained.

Currently, the local currency — the Cedi — is trading at GH¢15.60 to a dollar at various forex bureaus.

IC Securities noted that approximately $2.3 billion is expected to flow into the country in the latter part of 2024.

Watch the latest edition of BizTech below:



SA/OGB