“Those are weak reserve levels that no one expects to support currency stability,” said Courage Boti, an economist at GCB Capital Ltd. in Accra, who said the cedi would have fallen further already if Ghana had not suspended foreign debt payments. “Moreover, elections this year is a big risk in terms of foreign exchange demand pressure,” he said. The vote for a new president is due to be held in December.

Ghana, facing the aftermath of the Covid-19 pandemic and the impact of Russia’s invasion of Ukraine, announced a moratorium on its foreign obligations in December 2022. Since then, it has successfully revamped domestic bonds and reached an agreement in principle with bilateral lenders in January to restructure $5.4 billion of loans. Negotiations with eurobond holders, owed $13 billion, are still ongoing.

Once the debt restructuring is finalized, foreign investors may view Ghana investments more favorably. However, caution remains due to political risk ahead of the election, according to Boti.

As the world’s second-largest cocoa producer, Ghana’s economy relies heavily on imports ranging from toothpicks to heavy machinery, which are expected to increase leading up to the vote. The government forecasts GDP growth to accelerate to 2.8% this year from 2.3% last year.

“One of the policy priorities of the central bank under the IMF program is to rebuild foreign reserves,” said Kweku Arkoh-Koomson, an economist at Databank Group. “This means Bank of Ghana will not necessarily intervene on the market the way it should but just to smoothen volatilities,” he said, forecasting the cedi to weaken to 13.7 per dollar by the end of the year.

It traded almost unchanged at 12.9267 per dollar at 10:41 a.m. in Accra, the capital, according to data compiled by Bloomberg.