Source: newsthemegh.com
This week, as risk-averse market mood subsides, the Ghana cedi is anticipated to remain comparatively stable against the US dollar.
Despite declining inflation, demand for US dollars last week outstripped supply. The cedi dropped to values last seen in the second quarter of 2023 as a result of this.
The Bulk Oil Distribution Companies received $20 million from the Bank of Ghana in the 36th biweekly foreign exchange auction, but this was not enough to tamp down the escalating corporate demand.
Last week, the local currency suffered a small loss (0.46%) against the US dollar. In contrast, it rose 0.17% against the pound while holding steady against the euro.
The cedi has decreased in value against the dollar and the American dollar on the retail market respectively by around 11.6% and 22% so far this year.
Inflation for August 23 was reported by the Ghana Statistical Service (GSS) to have significantly decreased to 40.1%. Reduced food inflation, which reduced from 55% to 51.9%, was blamed for the cooling print.
Additionally, Fitch Solutions updated its projection for the Ghanaian cedi for the end of 2023, forecasting it will hit GHC11.40/$ rather than the original forecast of GHC12.40/$.
The cedi is expected to advance gradually as risk-off market mood subsides, according to this analyst.