Fiscal discipline, strong gold prices key to Cedi stability – Economists

Market analysts stress the need to keep gold prices high. They also highlight the importance of reducing government spending. These strategies are vital for maintaining the Ghanaian cedi’s recent gains against the US dollar.

Economist Dr. Theo Acheampong spoke on Channel One TV's The Point of View. He warned that the cedi's appreciation might be short-lived without consistent policy action. However, he expressed cautious optimism about the cedi's future.

Dr. Acheampong believes that with proper measures, the cedi could rise further this year. This would boost investor confidence and support economic growth. He noted that strong gold prices are a key factor in this trend.

"If gold remains high, I believe the cedi will continue to gain," he said. He also mentioned an upcoming mid-year review in July. Improved fiscal numbers and reduced spending could positively impact the foreign exchange market.

Adjei Boateng, Chief Investment Officer at Black Stars Advisors, emphasized currency stability over strength. "Stability is more valuable than short-term appreciation," he explained. It brings predictability for businesses and individuals.

The Governor of the Bank of Ghana supports stabilizing the cedi over three to five years. This approach allows better economic planning at all levels. Boateng added that current momentum could help ease Ghana’s external debt burden.

"If we build up reserves, we can reduce external debt," he noted. This would lower interest payments and create fiscal space for other priorities.