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UK-based firm, Fitch Solutions has warned that Ghana’s local currency faces potential depreciation if prices of gold decline globally.
According to them, a sharp decline in gold prices has a significant effect on Ghana’s international reserves and the Bank of Ghana will find it difficult to stabilize the cedi.
Currently, Ghana is experiencing a strong appreciation of the local currency against the US dollar but Fitch Solution is the country’s currency at risk if their sources of power to maintain the cedi level decline.
Earlier, Fitch Solution published that global trade tensions will be offset by the rise in gold prices and that will boost Ghana’s export earnings.
They also maintained that Ghana’s 2025 economic growth will not decline from 4.2% despite the introduction of US tariffs.
“We have maintained our 2025 economic growth forecast for Ghana at 4.2% despite the introduction of US tariffs. We believe that the adverse impact from global trade tensions will be offset by the rise in gold prices, which will boost Ghana’s export earnings.” Flitch stated.
They added elevated gold prices and lower energy costs will shoot the country’s GDP to 6.% and help stabilise the currency and contribute to a downward trend in inflation.
“Elevated gold prices, combined with lower energy costs, will drive the current account surplus to a record 6.9% of GDP in 2025. This will support foreign exchange reserves, help stabilise the currency and contribute to a downward trend in inflation over the coming mon…” They said.
The UK-based firm’s current research is a strong warning to the country should the prices of gold decline in the global market.
Source: Elvisanokyenews.net
