The Ghana cedi faced challenges last week as it lost 1.73% against the US dollar, bringing its year-to-date decline to 5.88%. Additionally, it depreciated by 2.76% against the pound and 4.23% against the euro. This downward trend is attributed to persistent demand pressures on the local currency.
Despite the Bank of Ghana auctioning $20 million to Bulk Oil Distributors at a 30-day forward rate of GH¢12.72 to the dollar, signaling increased demand, the cedi continued to struggle. Foreign investors repatriating funds from Government of Ghana bond coupon payments also contributed to the weakening of the local unit.
Analysts predict that the cedi may experience further depreciation in the near future due to ongoing corporate forex demand. Furthermore, the Eurozone’s marginal drop in inflation is expected to maintain pressure on the cedi, as investors anticipate the European Central Bank to maintain high interest rates, strengthening the euro against the cedi.
However, there is a ray of hope as the cedi started this week on a positive note by gaining marginally against the dollar and other major foreign currencies. This positive momentum follows the suspension of Foreign Exchange Trading Licenses of Guaranty Trust Bank Ghana and FBN Bank Ghana by the Bank of Ghana due to various breaches of market regulations.
Currently, the cedi is trading at GH¢13.05 to the US dollar at some forex bureaus. This seesaw of the cedi against major currencies reflects the economic challenges and uncertainties facing the Ghanaian economy.
