Following weeks of persistent devaluation, the Ghana cedi saw some gains last week against the US dollar and other major foreign currencies.
An improvement in market liquidity helped this.
Due in large part to seasonal demand prior to the weekends, corporate demand pressure was beginning to surface again at the time of the recovery.
In addition to auctioning off US$20 million to the Bulk Oil Distributing firms, the Bank of Ghana (BoG) sold US$37 million during the seven-day forward auction.
The cedi appreciated against the dollar by 0.46% week over week after the BoG’s backing. The week’s trading ended with the exchange rate at GH¢16.40 to one US dollar.
It also increased by 0.56% against the euro and 0.47% against the pound on a weekly basis.
The US Federal Reserve will meet this week to determine the path of the US policy rate.
Analysts believe there is potential for the US dollar index to go further as market expectations for a rate cut are intensifying. Last week, the index dropped by almost 100 basis points on a weekly basis to 101.114 points.
This action should cushion the cedi’s performance this week, together with the Bank of Ghana’s market intervention.
This action should cushion the cedi’s performance this week, together with the Bank of Ghana’s market intervention.
In the meantime, the cedi started trading at GH¢16.41 to the dollar on the retail market this week.
Since January 1, 2024, the value of the US dollar has decreased by 25.81%.
Source: Joy Business
