Ghana Cedi Set To Depreciate In 2023 By 22%

According to the UK-based Economist Intelligence Unit, the cedi would depreciate by almost 22% against the dollar in 2023.

This will make the local currency the third-worst performing currency on the continent of Africa, according to its Africa Outlook 2023 Report.

The EIU predicts that the weakening of the currency rate will continue after 2023, albeit to a lower level.

“Most African currencies have significantly depreciated against the US dollar in 2022, and we anticipate more depreciation in 2023, but to a lesser extent,” EIU iterated.

The report predicts that in 2023, the currencies of Sudan and Zimbabwe, both of which are in economic difficulty, will be among the weakest in the world, while those of Ghana, Malawi, Sierra Leone, Ethiopia, and Egypt, all of which will experience high rates of inflation, will see their currencies lose more than 10% of their value in relation to the US dollar.

The report continued by stating that African superpowers Kenya, Nigeria, South Africa, Angola, and Algeria would not be exempt from the currency deterioration and will continue to see currency declines in 2023.

In contrast, the Zambian kwacha, which will increase in value by almost 8% versus the US dollar in 2023, will continue to be Africa’s best-performing currency.

Moreover, the CFAs of Burkina Faso and Cameroon are next, and both are expected to appreciate against the US dollar.

Just over 27% of the Ghana cedi’s value has been lost thus far in 2022. At the moment, it is trading at 11.25 to one US dollar in the retail market or the foreign exchange bureau.

Background

One of 2022’s worst performances of the Ghanaian cedi occurred over the first eleven months of the year.

However, once the Staff-Level Agreement between the International Monetary Fund and the government was revealed at the start of this month, its value increased significantly.

Conclusion

Stay tuned for more interesting news updates.

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