Currency analyst, and Lead Research at GCB Capital, Courage Boti is hopeful that a quick review of Ghana’s programme by the International Monetary Fund (IMF) in March 2024 could help the cedi regain its strength against the dollar from the recent depreciation.
The cedi, even though is beginning to pick up, has suffered some setbacks this year despite the country receiving $600 million second tranche funding from the IMF.
In addition, the World Bank has also released an amount of $300 million for the country, following a successful first review by the IMF. The IMF is expected conduct a second review by mid-year.
However, Mr. Boti believes a quick second review by the IMF could be very important in boosting confidence and strengthen the cedi.
“The second review of the IMF should be in March [2024] and by then they should be in town. Depending on how we fare on that programme review, it will give us some more tailwind”.
He, however warned that the performance of the cedi will also be contingent on electioneering spending, which must be checked by mid-year to control expenditure.
“If by June-July election expenditure do not cut to the fore, and the first half review shows that we are broadly on track on our macro target, I think the sentiments will be fairly balanced, and we should see a steady currency”, he said.
Government told to properly manager reserves
Giving some more advice, Mr. Boti said it is important for government to properly manage Ghana’s reserves.
He pointed out that a good foreign currency reserve will not only strengthen the cedi, but will also serve a buffer in times of shocks.
“We have seen some funds come in from the IMF and the World Bank recently. It’s also important to manage our reserves very well going forward. I think that is also very crucial”.
He expressed optimism that Ghana will pass the second review if the country is able to meet critical benchmarks needed to stabilize the economy.
