Cedi remains under pressure due to Christmas demand, going for GH¢11.90 at forex bureaus
The cedi remained under pressure over the fortnight, extending its year-to-date depreciation against the US dollar to 10.04%. In the interbank market, the currency weakened by 1.39% to GH¢11.62 to a US dollar but gained 0.70% and 0.47% against the pound and euro to GH¢15.40 and GH¢13.24, respectively. Retail forex market performance was similarly mixed, […]
The Ghanaian cedi has continued to face pressure over the past two weeks, further eroding its value against the US dollar by 10.04% year-to-date. In the interbank market, the currency dropped by 1.39% to GH¢11.62 against the dollar. However, it saw slight gains of 0.70% and 0.47% against the pound and euro, reaching GH¢15.40 and GH¢13.24, respectively.
The mixed performance of the cedi in the retail forex market saw a 0.21% appreciation against the US dollar and a 0.91% increase against the euro. Conversely, it weakened by 0.31% against the pound to GH¢15.88. Databank Research cited sustained forex demand from the energy and manufacturing sectors as the primary reason for the cedi's weakness against the US dollar.
This demand came with relatively tight interbank supply, despite Bank of Ghana's forex support of approximately US$445 million this September, falling short of the US$500 million target.
Externally, the Federal Reserve's September rate hike and the resulting dollar strength contributed to the cedi's pressure. Meanwhile, the weaker performance of the pound and euro provided some support through cross-rate effects. Databank Research forecasted that the cedi would likely maintain a mild depreciation trend as seasonal foreign exchange demand builds up during the festive period. At the forex bureaus, the cedi opened the week trading at around GH¢11.90 against the US dollar.
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