Standard Bank of South Africa, parent company of Stanbic Bank Ghana, is forecasting that the Ghana cedi will depreciate further by 11 per cent to trade at GH₵6 to a dollar before the end of the second quarter 2020.
According to the Standard Bank’s January 2020 edition of the African Monthly Report (AMR), the depreciation of the Ghana cedi “is inevitable”, adding that it will end trading at GH₵5.85 to a dollar in the first quarter and at GH₵6.00 to the dollar at the end of the second quarter of this year.
“Depreciation seems inevitable this year; the only question is the magnitude. We expect USD/GHS to end Q1:20 at 5.85 and Q2:20 at 6.00,” portions of the report stated.
“In recent months, the Bank of Ghana (BoG) has been steadfast in intervening to restrain the depreciation trend. Just as last year, it is likely that the BoG will rely on government issuance of Eurobonds to provide it with the ammunition to intervene in the forex market.”
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The cedi began the year trading around GH₵5.60 to a dollar on the interbank market and GH₵5.79 at forex bureaux.
With some few days into the year, the local currency began a steady rally and witnessed a sharp appreciation of some 3.6 per cent at the end of January 2020 to trade at an average of GH₵5.40 to a dollar.
Nonetheless, some economists have asserted that depreciation of the Ghana cedi will be inevitable this year because the government of the day as the country goes to the poll in December will overspend in its bid to appeal to electorates. This could put undue pressure on the local currency which might result in a sharp depreciation.
