Pulse.com.gh logo
Go


Economy of Ghana Cedi to gain strength against dollar - Fitch

Fitch is predicting that an end-year rate of GHC4.33 against the US dollar. For 2018, it is projecting GHC4.19 against the US dollar.

  • Published:

Fitch has predicted that the local currency, the cedi, will appreciate against the US dollar for the rest of the year.

According to the agency, this is because the economic growth outperforms earlier estimates.

Fitch is, therefore, predicting that an end-year rate of GHC4.33 against the US dollar. For 2018, it is projecting GHC4.19 against the US dollar.

READ ALSO: My biggest nightmare yet is sanctioning Capital/UT Banks – Ofori-Atta

“The cedi is likely to begin a gradual appreciatory trend from H217 (second half of 2017) onwards due to relatively high real interest rate and significant expansion in Ghana's oil and gas production that will support real GDP growth. Given the country's high nominal interest rate, we are forecasting significant strength in total return terms,” BMI stated in its latest report.

“We forecast a gradual short term appreciatory trend for the cedi, expecting the currency to strengthen from its average for the year to date of GHC4.38/USD to an annual average of GHC4.33/USD for the full year.”

The cedi is currently trading at GHC4.39 against the US dollar on the interbank forex market and at about GHC4.45 at the forex bureau.

READ ALSO: Ibrahim Mahama can go for his equipment – REGSEC

In the long-term, BMI also indicated that the continuous Cedi depreciation will end and allow for a gradual appreciation in the years ahead.

On risks, it said “the most significant downside risk to our forecast is if Ghana's disinflationary trend reverses. A key part of our forecast is that real interest rates will remain relatively high compared to the US as inflation in the former continued to fall. Any shock, such as a major outbreak of army worms or a major uptick in the destruction of agricultural land by illegal miners, could see food price inflation interrupt the current disinflationary trend.”

Another potential risk it could come from some challenges emerging with the IMF over the ECF.

“If the facility ends ahead of schedule or if the IMF releases a negative statement on Ghana's finances, this may create depreciatory pressure,” it added.

Do you ever witness news or have a story that should be featured on Pulse Ghana?
Submit your stories, pictures and videos to us now via WhatsApp: +233507713497, Social Media @pulseghana: #PulseEyewitness & DM or Email: eyewitness@pulse.com.gh.

Recommended Articles

Recommended Videos




Top Articles

1 2018 Budget Review Prepare to pay 35% tax if you earn 10k and abovebullet
2 Taxes In Ghana Don't rejoice; VAT has been hiked through ‘backdoor’ –...bullet
3 Kwabena Duffuor Official: Duffuor’s assets not being auctionedbullet
4 2018 Budget Review Gov’t imposes tax on luxury vehiclesbullet
5 Menzgold Ghana Don't deposit money with Menzgold – BoG cautions...bullet
6 Investment banks in Ghana Top 5 investment banks in Ghana and...bullet
7 Uche Ofodile Captain Planet’s wife heads MTN Liberiabullet
8 Education Top 5 private high schools in Ghana according to...bullet
9 Full Text 2018 mid-year budget review presented by Ken...bullet
10 Economy Of Ghana Finance Minister presents mid-year...bullet

Top Videos

1 New Discovery Ghana discovers new mineral, lithium in commercial quantitiesbullet
2 Support Finance minister buys Kantanka carbullet
3 Forbes 2018 Africa's billionaires rich listbullet
4 Money Alert Meet Africa's richest womanbullet
5 Plane Crash Starbow suspends operations following plane crashbullet
6 Tech 6 reasons you should buy an iPhone SE instead of any of...bullet
7 Dr Joseph Siaw Agyepong Nobody can collapse my company – JOSPONGbullet
8 New Phone Nokia’s MWC 2018 Event in Under 10 Minutesbullet
9 New Phones Nokia MWC 2018 Event in 5 minutesbullet
10 Video We are determined to move Ghana beyond aid - Bawumiabullet

Business