The UK-based firm attributes this to an expected increase in the country's reserves as a result of $3 billion from the International Monetary Fund (IMF) support program and improvement in the current account position.
Kruninger cited several reasons for this outlook, including the disbursement of Special Drawing Rights, which will boost Ghana's foreign reserves and improve the Bank of Ghana's ability to defend the currency.
Additionally, Kruninger mentioned that overall investor sentiment will improve as the Debt Exchange Program concludes and the government makes progress on fiscal consolidation and the IMF program receives board approval.
“We hold a relatively positive view on Ghana's current account dynamics in 2023,” Kruninger said. Fitch Solutions predicts a narrow current account deficit of 4.0% of Gross Domestic Product (GDP) for Ghana in 2023, compared to 4.4% recorded in 2022, which is expected to have a positive impact on the value of the cedi.
Kruninger also mentioned that production increases in Ghana's top three exports, gold, oil, and cocoa, will likely support the cedi, leading the firm to believe that the cedi will remain on an upward trajectory with significantly less depreciatory pressures in comparison to 2022.
In the past two weeks, the local currency has appreciated in value by more than 5% against the US dollar, reducing its year-to-date loss. The government of Ghana is optimistic about concluding its Debt Exchange Program by the end of February 2023.