Cedi Depreciation: UK-Based Economist Intelligence Unit Predicts Almost GH¢8 To $1 By End Of 2022

Cedi Depreciation: UK-Based Economist Intelligence Unit Predicts Almost GH¢8 To $1 By End Of 2022

  • Ghana's local currency, the cedi, has been projected to depreciate to GH¢7.87 to $1 by the close of 2022
  • The UK-based Economist Intelligence Unit said the fall will be driven by global supply challenges for oil and gas due to the Russia-Ukraine war
  • The Economist Intelligence Unit also predicts that inflation will remain remain high for the remainder of the year

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UK-based Economist Intelligence Unit (EIU), a global economics analyst, has predicted that the Ghana cedi will hit GH¢7.87 to $1 by end of this year.

With Ghana’s local currency currently selling at GH¢7.69 to a dollar, the prediction by the EIU presents a further slump of the cedi, which has been struggling against major trading currencies since the start of the year.

A report by Joy News that quotes EIU’s April 13, 2022, analysis of Ghana’s economy states that the projection of the cedi fall by December this year will be influenced by the country’s heavy dependence on imports.

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Ghana cedi notes
The cedi has been projected to fall further by 0.7% by end of 2022. Source: Getty Images.
Source: Getty Images

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Also, EIU points to “some actions of the offshore investors in Ghana’s bonds” as the reason for the projected cedi depreciation.

The Economist Intelligence Unit also puts the cedi’s average end-of-year depreciation at GH¢7.35.

The EIU further makes a bleak prediction about Ghana’s inflation, stating it will most likely remain high at an average of about 15% throughout the year.

The prediction about Ghana’s inflation rate, according to the report, will be driven in part by challenges in the global supply of oil and food prices due to the Russia-Ukraine war.

Cedi Still The Worst-Performing Currency In Africa Despite Bank Of Ghana Intervention - Bloomberg

The cedi continues its slump to the US dollar and is still ranked the worst-performing currency in Africa despite the Bank of Ghana's decision to pump more dollars into the system.

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ECG disconnection: University of Ghana risks total darkness over GH¢33m electricity debt

According to a report quoting a Bloomberg analysis, the cedi has recorded an 18.21% depreciation rate to the dollar in the first quarter of this year.

The report indicates that the situation would have been worse for the central bank's intervention.

Ghana Records 19.4% Inflation: Transport Fares, Food Prices Push Figure To 13-Year High

Ghana's March 2022 inflation figure rose to a staggering 19.4%, driven significantly by high transport fares, and fuel and food prices, the country's highest in 13 years.

In February, Ghana's annual inflation rate accelerated for the ninth consecutive month to 15.7% from 13.9% in January 2022.

According to data released by the Ghana Statistical Service (GSS) on Wednesday, April 13, 2022, for March this year, foodstuffs like oil and fats recorded a 28.2% inflation, while water recorded a 27.1% inflation.

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