Cedi to stabilise against dollar from July after debt restructuring deal – Dr. Adu Sakordie

Economist Dr. Adu Owusu Sakodie has said he expects the cedi to make some gains from July this year following the conclusion of the debt restructuring deal with external creditors.

He is hopeful the local currency will respond favourably as the market receives the good news about Ghana concluding the debt deal.

“It often takes some time for this development to impact the market and that is why the cedi has not recovered strongly yet”, he said.

He explained that there is normally a lag period for the market to react to the news.

“I believe that in July 2024, we will be seeing some positives for the Ghana cedi when it comes to its performance against the dollar” he expressed optimism.

Some analysts had attributed the recent depreciation of the cedi to delays in concluding the debt restructuring deal.

“We are expecting the local currency to recovery strongly, after the bondholders sign the agreement on the debt restructuring in the coming weeks”, he maintained.

Debt restructuring deal and the economy

Dr. Sarkodie observed that the development will go a long way to help in the recovery of the Ghanaian economy.

“This is because we are expecting investors to also respond accordingly to this development and that could help deal with the confidence issues as well”, he said.

He is of the view that the deal will give government some fiscal space to help managers of the economy channel the country’s resources to other critical sectors of the economy.

Businesses and the Debt Restructuring Deal

Speaking on the same programme, the President of the Ghana National Chamber of Commerce and Industry (GNCCI), Dr. Clement Osei Amoako welcomed the progress made in restructuring the external debt.

“This will help to restore investor confidence in the economy, looking at what has happened over the past two years”.

“Businesses have struggled over the years, from high interest, soaring inflation and depreciation cedi, and not so favourable business environment”, he said

He described the development as a big relief for businesses, particularly manufacturers.

“We are also expecting the Ghana cedi to respond positively to this development, as we have already seen some marginal stability and we want that to continue”.

He, however wants Government to institute the structures that will aid fiscal prudence after the debt restructuring deal.

“We are worried about past developments, but we believe that government has learnt their lessons when it comes to the economy”.