Cedi currently selling at GH¢10.27
The Head of Finance at Merban Capital, Nelson Cudjoe Kuagbedzi, has countered projections by research institutions that the local currency will end 2025 at GH¢13 or GH¢15.
According to him, the cedi may rather stabilise at GH¢11 or GH¢12 to the dollar by the end of 2025.
He noted that the current gains being witnessed in performance cannot be sustained in the long run, as the government will soon have to start spending.
Kuagbedzi noted that when the government starts spending, the exchange rate will see some depreciation.
“We don’t expect the cedi to appreciate throughout the year; at a point, it will stagnate, and actually settle within a band. I do not agree with the projection by Fitch and others, saying that the cedi will stagnate at GH¢15 by the end of the year.
“Within the short term, you will realise that the government is trying to build enough reserves to meet the demand of those who need the forex,” he was quoted by citinewsroom.com to have said.
He noted that the currency will begin depreciating again before stabilising at GH¢12 by the end of the year.
“Again, the government has not started paying out its payables, because those payables are still under audit. Even though we have not started servicing debts yet, since they came to power. So, we expect that once those expenditures set in, the currency will begin to shake again.
“We don’t expect it to go beyond GH¢12 by the end of the year. I expect the cedi to stabilise with the band of GH¢11 or GH¢12 by the close of the year. Currently, the government is embarking on a contractionary Economic Policy. They are not spending on or starting any mega project. So, there is enough reserve with the Bank of Ghana. As soon as they start spending, you will see that the cedi will begin to shake. But it will stagnate within the band of GH¢11 by the end of the year,” he stated.
The local currency, the cedi, has appreciated against major foreign currencies in the past few weeks to currently selling at GH¢10.27 to a dollar.
SSD/AE