Cedi weakens as forex demand outpaces interbank supply; one dollar equals GH¢11.95

The Ghanaian cedi faced renewed pressure over a two-week period, erasing its 4.87% gain in August and extending its depreciation to 8.77% against the US dollar. In the interbank market, the cedi slipped 1.85% to GH¢11.46 per dollar, while weakening 1.75% against the pound and 2.04% against the euro. Despite this, retail forex movements remained relatively stable, with the dollar, pound, and euro trading at GH¢11.90, GH¢15.93, and GH¢13.68 per dollar, respectively.

The cedi's decline was largely driven by strong corporate and offshore forex demand, particularly for import payments, coupon repatriation, and an early year-end inventory build-up. This demand faced limited interbank supply, with the Bank of Ghana reportedly targeting a smaller US$500 million intervention in September. Consequently, market liquidity may become strained if not addressed.

Looking ahead, Databank Research anticipates a continued mild depreciation of the cedi in the coming weeks, though the planned US$700 million forex supply from GoldBod, alongside ongoing BoG support and reserve accumulation, should bolster market liquidity and mitigate the risk of a disorderly adjustment. Meanwhile, the cedi traded at GH¢11.95 per dollar in the forex bureaus, with an interbank rate of GH¢11.46. Year-to-date, the cedi has depreciated by nearly 9.0%.