The Economist Intelligence Unit (EIU) of the United Kingdom predicts a 22% depreciation of the cedi against the US dollar in 2023.
According to its Africa Outlook 2023 Report, this will place the local currency as the third worst performing currency on the African continent.
The EIU expects the currency weakness to continue, albeit to a lesser extent, into 2023.
“Most African currencies have lost substantial value against the US dollar during 2022 and we expect exchange-rate weakness to continue into 2023, albeit to a lesser degree”.
It maintained that the currencies of Sudan and Zimbabwe will be among the weakest in the world in 2023, while Ghana, Malawi, Sierra Leone, Ethiopia, and Egypt, all of which will face high inflation, will see their currencies depreciate by more than 10% against the US dollar.
It went on to say that African powerhouses Nigeria, South Africa, Angola, Algeria, and Kenya will not be immune to currency weakness and will see their currencies depreciate further against the US dollar in 2023.
Meanwhile, the Zambian kwacha will maintain its position as Africa’s best performing currency in 2023, with an 8% appreciation against the US dollar.
It will be followed by the CFAs of Burkina Faso and Cameroon, which are all expected to rise against the US dollar.
So far in 2022, the Ghana cedi has lost slightly more than 27% of its value. In the retail market or the forex bureau, it is currently trading at 11.25 to one US dollar.
Following one of its worst performances in the first 11 months of 2022, it improved significantly in value following the announcement of the Staff-Level agreement between the International Monetary Fund and the government at the beginning of this month.