Cedi to witness more pressure if current account deficit is not checked – World Bank

The World Bank has warned that the Ghana cedi may continue to come under pressure in 2023 against the U.S dollar if efforts are not directed at controlling the country’s current account deficit to a sustainable level.

The caution was captured in the World Bank’s January 2022 Global Economic Prospects report.

“Large current account deficits are likely to keep currencies under pressure in several countries, adding to inflation and external vulnerabilities (Gambia, Ghana)”, the report said.

The report encouraged government to take extra measures to manage its current account deficit in 2023.

It further pointed out the need to institute policies that will boost exports to narrow the current account deficit, while controlling imports.

It stated that introducing these actions together with policies aimed at checking inflation in the coming months will help stabilise the economy and deal with some of the threats that will impact negatively on the local currency.

Cedi recent performance

The Ghana cedi was on January 10, 2023 selling at ¢12 to the US dollar in the retail or forex market, following days of sustained stability.

This was about 0.86% loss in value since the beginning of the year.

The Bank of Ghana, however quoted a dollar for ¢9.00 on the interbank forex market.

Checks by Joy Business at some forex bureaus at the time indicated that the pound was the major currency that had lost more value so far in 2023. One pound was going for ¢14.20.

The euro had also depreciated by a little over 1%, trading at ¢12.50.