The Covid-19 pandemic and the conflict in Russia have magnified Ghana’s fiscal and external imbalances, S&P said.
The local currency has depreciated by about 18.89% to the dollar on the interbank market and 26% on the retail market.
Ghana’s balance of payment deficit has more than doubled for the first quarter of 2022
Further indicating that, it do not expect that private investment will meaningfully cushion the negative impact of subdued public infrastructure spending on the market’s construction industry growth, the agency said.
According to the institute, this will help bring competition amongst the various shipping lines while helping to address the issue of the depreciating cedi due to significant funds that are repatriated out of the country by these international liners.
According to a Bloomberg report, the Ghana Cedi depreciated by 18.21 percent against the U.S dollar in the first quarter of 2022. This places the Cedi as the worst-performing currency in Africa while the Angolan Kwanza is the best-performing currency in Africa as it currency appreciated by 24 percent against the dollar.
The senior economist with databank indicated that, checks from some forex bureaus and commercial banks show that the cedi is gaining marginal strength against the dollar as at the time of interview, last week, as the local currency was trading averagely at GH¢7.84 to the dollar on the retail market, compared to about ¢8.06 couple of days before the Central bank’s
Fitch Ratings in a podcast said Ghana’s international reserves position has become very reliant on Eurobond issuance. Indicating that, Ghana is not in a situation where the government needs to constantly roll over hard currency debt or whose debt market is wholly reliant on non-resident investors. In supporting the Fitch's position, the University of Ghana economist noted
The Russia-Ukraine invasion induced unprecedented spike in crude oil and gas prices is troubling many economies. This, coupled with the escalating U.S dollar exchange rate to the local currency (Cedi) threatens petroleum products supply in the country.
the Ghana Union of Traders (GUTA) has called on regulators of the forex market to fast-track the proposal of making the Chinese Yuan as the only trading currency when doing business with China. They believe such a move will reduce pressure on the Cedi because imports will not be done with US dollars as most Ghana's import currently come from China because of their cheaper