The Ghana cedi has experienced a slight decline over the past two weeks as end-of-year demand for foreign exchange increased, placing pressure on the local currency.
Market data indicates that the cedi depreciated modestly against key international currencies, influenced by heightened seasonal demand and reduced forex interventions from the Bank of Ghana (BoG).
On the interbank market, the cedi ended the two-week period at GH¢11.41 to the US dollar, compared to the previous rate of GH¢11.12. It also weakened by 4.62% against the British pound to GH¢15.26 and by 3.87% against the euro to GH¢13.32.
In the retail market, the currency slipped by 0.41% to trade at GH¢12.05 to the dollar. It further lost 0.94% of its value against the pound, closing at GH¢15.90, and declined by 1.08% against the euro to GH¢13.95.
Databank Research noted that the depreciation aligns with historical trends, as forex demand typically rises during the festive season. The institution added that volatility has been relatively moderate compared to previous years, supported by improved forex supply and targeted policy interventions.
According to the research firm, the cedi is expected to maintain relative stability in the short term, with a projected retail trading range of GH¢11.67 to GH¢12.15 to the dollar. It further observed that lower Open Market Operations (OMO) yields may have encouraged banks to increase their forex holdings, although the Bank of Ghana’s revised net open position limits (0% to -10%) have helped curb excessive pressure on the currency.
An anticipated IMF disbursement is also expected to boost market confidence and help contain further depreciation.
As of the start of the week, the cedi was trading at GH¢12.20 on the retail market. Despite recent declines, the currency has appreciated by 27.78% since the beginning of the year.
Source: The Ghana Report
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