Ghana’s impressive currency is set for more gains

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Following a dramatic year for Ghana’s economy in 2023, 2024 promises a recovery that will lead to its currency’s resurgence. A recent analysis detailed that the Gold Coast’s currency, the Cedi, at the end of 2024 would have an exchange rate of GH¢13.4 ± 0.10 to one US dollar. This is pivotal given the fact that in October 2022 Ghana had the world’s worst-performing currency.

  • Ghana’s Cedi is expected to reach GH¢13.4 ± 0.10 against the US dollar by the end of 2024.
  • IMF and World Bank expected to release funds, bolstering Ghana’s economy.
  • Databank Research highlights the IMF loan program as pivotal for Ghana’s economic recovery.
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Databank’s Research, as seen in the Ghanaian newspaper, MyJoyOnline, showed that the impending currency gain would be a result of expected inflows from multilateral sources.

Additionally, the International Monetary Fund will be releasing more funds to Ghana in 2024 as part of the Fund-support program, while the World Bank is expected to disburse up to $550 million, with $300 million going to Development Policy Operations (DPO) and $250 million for the Ghana Financial Stability Fund (GFSF).

“The annual cocoa loan syndication should also prop up the reserve level and strengthen the external buffer. The successful IMF program would help anchor Cedi’s performance in 2024”, it pointed out.

Back in May 2023, after a grueling assessment period, the executive board of the International Monetary Fund authorized a $3 billion, three-year loan package for Ghana, which at the time immediately allowed for a payout of roughly $600 million.

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According to Databank Research, this loan is sure to be very instrumental in the recovery of Ghana’s hard-hit economy.

“Progress in the fund-supported program should improve market sentiments and benefit the local unit,” Databank research read.

“We expect these inflows to strengthen the reserve position and increase the buffer’s capacity to contain external shocks while improving its ability to meet external financing needs. The annual cocoa syndicated loan and further tranche disbursements should further prop up the reserve position”, it added.

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Additionally, it stated that the US policy shift may likely reduce depreciation strain on the cedi, as it stated “The recent US real sector data points to a shift in the US Fed policy stance to cushion the economy. We believe the dovish Fed policy will serve as a tailwind for emerging market currencies like the Ghana cedi.”

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