Cedi remains under pressure due to Christmas demand; going for GH¢11.90 at forex bureaus

Throughout the previous two weeks, the cedi experienced pressure, marking its year-to-date depreciation against the US dollar at 10.04%. In the interbank market, the cedi fell by 1.39% to GH¢11.62 against the US dollar, but experienced an increase of 0.70% and 0.47% against the pound and euro, reaching GH¢15.40 and GH¢13.24, respectively.

However, the performance in the retail forex market was mixed, with the cedi appreciating by 0.21% against the US dollar and 0.91% against the euro, resulting in values of GH¢11.93 and GH¢13.73, respectively. Conversely, it depreciated by 0.31% against the pound to GH¢15.88.

Databank Research suggested that the cedi's weakness against the US dollar was due to continuous forex demand from the energy and manufacturing sectors. This decline occurred in the face of relatively restrictive interbank supply, despite the Bank of Ghana providing approximately US$445 million in forex support through September 2026, which is below the US$500 million target.

Internally, the Federal Reserve's September interest rate hike and the resultant dollar strength contributed to the pressure on the cedi. Meanwhile, the weakness in the pound and the euro acted as cross-rate support. Databank Research forecasted that the cedi would continue to depreciate mildly as seasonal foreign exchange demand increases during the festive season. Lastly, at forex bureaus, the cedi began the week at around GH¢11.90 to a dollar.