CEDI DEPRECIATION: Cedi Hits GH¢14.18 To a Dollar;
Year-To-Date Loss Reaches 13.45%
The
depreciation of the cedi to the dollar continued unabated as the local currency
hit GH¢14.18 to the American greenback on the retail market. This is coming
despite the Bank of Ghana selling $20 million to the Bulk Oil Distribution
Companies (BDCs) in the 51st auction. The local unit has so far lost about
13.45% to the US dollar, making it one of the poor-performing currencies on the
African continent in 2024.
The
local unit began this week selling at GH¢14.05 to the dollar at most forex
bureaus. Though analysts expected this auction to soak up some forex demand on
the market, the prevailing corporate forex demand pressures continue to weaken
the local unit.
The
local currency also lost major ground against the euro and the pound
respectively. However, if Ghana gets a deal with its Eurobond holders and the
expected inflows from the International Monetary Fund and other multilateral,
the cedi woes may be reversed.
The
cedi has been on a rapid depreciatory trend since February 2024, caused by
investor concerns over Ghana’s progress of restructuring its commercial debt,
as well as the sustained strength of the US dollar.
“We
expect that this will boost investor confidence in Ghana's economy and
policymaking processes, leading to increased foreign exchange inflows and a
consequent strengthening of the cedi in half-year 2024”, Fitch Solutions added.
Last
week, the Central Bank sold $13 million on the spot market though it could not
keep the local unit afloat as the cedi ended the week, shedding 0.90%
week-on-week to the American greenback on the retail market.
The
cedi also trimmed 1.32% and 1.54% week-on-week against the pound and the Euro
on the retail market.