The decline the report said will be lower than the 12.9% depreciation to the American currency in 2019.
Report predicts the Ghana cedi to fall by 8.6 percent in 2020, here’s why
A Databank 2020 Research has projected that the Ghana cedi will decline in value by 8.6 percent against the dollar by the end of 2020.
“On account of the anticipated BoG support, partly offset by fiscal risks to the outlook, we obtain our year-end 2020 forecast for USD-GHS interbank rate at GHS6.05 ± GH¢0.10 (FY-2020 Depreciation: 8.60% ± 1.50%)”, investment bank,” the report said.
The report noted that “We feel assured by the posture of the monetary authorities in maintaining a broadly stable Ghana cedi in 2020. Our optimism is grounded in the Bank of Ghana’s bi-weekly FX forward auctions which would deepen forward trading and limit spot market pressures.”
The BoG published its FX forward auction calendar for 2020, signalling its plan to inject a cumulative size of US$715 million into the forex forward market in 2020.
The report said: “We note a relatively higher forward auction target of $40 million planned for Quarter One (Q1)-2020 compared to $25 million per auction after Q1-2020. We view the higher-sized allotments for Q1- 2020 as reflecting the Bank of Ghana’s commitment to increase forward activities in Q1-2020 when seasonal pressures tend to shock the spot market.”
It also expected the government’s plan for early issuance of a $3 billion Eurobond to bolster the Bank of Ghana’s capacity to execute its Foreign Exchange forward auctions.
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