The Ghanaian cedi has experienced a 4.44% decline in value against the US dollar since the start of the year. This depreciation trend continued last week, with the local currency weakening by 1.37% against the American dollar due to significant corporate demand and pressure from cedi-funded foreign exchange.
Despite efforts by the Central Bank to stabilize the cedi by selling $18.5 million on the spot market, the currency still weakened to close at a mid-rate of GH¢12.75 to the dollar. Additionally, the cedi saw losses of 1.10% and 1.47% against the pound and euro on the retail market.
During the week, the government fulfilled its coupon obligations on new bonds, releasing approximately GH¢5.1 billion to investors. However, this did not relieve the pressure on the cedi, as it continued to weaken on Monday, February 26, 2024, selling at GH12.85.
Analysts attribute the cedi’s funding towards foreign exchange demand to the improved liquidity of the local unit on the market. Moreover, uncertainties surrounding rising inflationary pressures have led investors to expect further weakening of the cedi against major trading currencies by the end of the week.
