The Ghana cedi came under renewed pressure over the past two weeks, extending its depreciation against the major foreign currencies amid sustained demand for foreign exchange on the market.
In the interbank market, the local currency weakened to GH¢11.63 against the US dollar, GH¢15.62 to the British pound and GH¢13.49 to the euro. This translated into losses of 3.01 percent against the dollar, 1.65 percent against the pound and 1.56 percent against the euro.
The retail forex market recorded similar movements, with the cedi depreciating by 3.07 percent against the dollar, 1.56 percent against the pound and 1.49 percent against the euro. It traded at average rates of GH¢12.20 to the dollar, GH¢16.05 to the pound and GH¢14.10 to the euro.
Analysts at Databank Research indicated that the cedi’s decline exceeded their projected upper trading range of GH¢11.40 to the dollar in the interbank market.
According to the firm, the Bank of Ghana maintained a cautious approach toward foreign exchange intervention despite expectations that the country could receive a US$385 million disbursement from the International Monetary Fund.
Databank Research suggested that the central bank’s posture may reflect efforts to conserve foreign exchange reserves while waiting for stronger and more sustainable inflows into the market amid persistent demand pressures.
The research firm expects the cedi to remain under pressure in the near term, projecting that the currency could trade within a range of GH¢11.35 and GH¢11.86 to the dollar on the interbank market over the next two weeks.
Analysts say the direction of the local currency will continue to depend largely on the balance between demand for foreign exchange and available market supply.
At the beginning of the new trading week, the cedi was selling at around GH¢12.20 to the dollar in the retail market.
Despite the recent depreciation, the cedi’s year-to-date loss currently stands at 0.20 percent.
Source: businesspostonline
