The Ghana cedi is expected to sustain gains in the second quarter amid robust foreign exchange support and improving market confidence.
According to Databank Research, this forecast is underpinned by the Bank of Ghana’s continuous market interventions, a volatile US dollar, and expected inflows from the International Monetary Fund (IMF).
The central bank’s active engagement in the forex market through targeted interventions will remain central to anchoring expectations, ensuring adequate liquidity, moderating volatility, smoothing out imbalances, and reinforcing confidence in the cedi.
Similarly, rising concerns over the US economic outlook, compounded by renewed trade tensions and fiscal policy uncertainty, have begun to weigh on investor appetite for dollar-denominated assets. This shift is expected to create favorable tailwinds for Sub-Saharan African currencies (SSA), including the cedi, as relative demand improves and external pressures ease.
Improving Market Sentiment to Reduce Speculative Attacks on the Cedi
Databank further noted that enhanced macroeconomic stability and increasing investor confidence in Ghana’s policy direction have helped limit speculative positioning against the cedi.
With lower capital flight and reduced market panic, the environment will become more conducive to sustaining the cedi’s resilience.
IMF Support to Augment FX Buffers
The recent staff-level agreement on the fourth review of Ghana’s US$3.0 billion Extended Credit Facility (ECF) reflects continued progress in fiscal and structural reforms.
Upon expected IMF Board approval, Ghana will secure a US$370 million tranche disbursement.
“We expect this inflow to augment our existing foreign exchange buffers and help supply-side interventions, cushioning the GHS from any potential external shocks,” Databank Research added.
The Ghana cedi has recorded an aggressive appreciation against the US dollar and other major foreign currencies over the past six weeks.
It is presently trading at about GH¢12.90 to one US dollar in the retail market.
