Currency Analyst with Databank Research, Kwaku Arkoh Koomson, is predicting a marginal depreciation of the cedi in 2024 due to reduced market volatilities compared to 2023.

According to him, since 2024 is an election year, foreign investor participation in the market will be minimal, thus having a less impact on the cedi’s performance.

Reacting to concerns about the deepening of the cedi’s woes in the first month of 2024 despite the $600 million inflow from the International Monetary Fund support, Mr. Koomson said the depreciation would not be that deep as compared to last year.

“Foreign investor participation in markets is quite limited both on the fixed income side and equity side. And as such the liquidity they will introduce into the market to help stem all these pressures will be absent.

“Generally for the cedi this year [2024], we are likely to see a depreciation trend although you’ll realise that this trend is not as steep as we saw in the first quarter of last year”, he added.

The Bank of Ghana sold $7 million on the spot market last week and auctioned $20 million to the Bulk Oil Distribution Companies in the Forward Forex Auction.

However, the local currency could not hold its ground against the American greenback.

It lost 0.60% week-on-week to the dollar due to demand from the energy sector to settle US dollar debt obligations and the agricultural sector for seasonal restocking. The cedi also shed 0.64% week-on-week versus the pound but remained stable against the euro on the retail market.