The Ghana cedi extended its depreciation against the US dollar in both the interbank and retail markets over the past two weeks, while recording mixed performance against other major currencies.
In the interbank market, the cedi weakened by 1.42% against the US dollar and 1.29% to the pound, respectively. It sold at GH¢11.79 to the dollar and GH¢15.60 to the pound.
It, however, appreciated by 0.35% against the euro to GH¢13.20.
Similarly, in the retail market, the cedi depreciated by 1.45% against the US dollar, averaging GH¢12.10 to the American greenback, while gaining 0.47% against the pound and 0.55% against the euro to close the period at GH¢15.80 and GH¢13.65, respectively.
Despite intermittent foreign exchange supply, the cedi continued to exhibit whipsaw price action, with brief corrections amid persistent pre-festive import demand and higher energy costs.
“Looking ahead, we expect GoldBod’s spot-gold sales and BoG interventions to provide near-term support, potentially triggering a sharp appreciation surprise and a brief 4 to 5-day period of stability. However, sustained appreciation will depend on whether spot inflows can soften seasonal import demand without compromising the BoG’s [Bank of Ghana] reserve-accumulation target”, Databank Research said.
“On balance, we expect US dollar/GHS [US dollar/Ghana cedi] to trade within a wide GH¢11.60 to GH¢12.10 band, with GH¢ 12.00 as a likely near-term cap, although risks remain skewed towards nominal depreciation if energy costs and import demand outpace FX [foreign exchange] support”.
Meanwhile, the cedi began this week appreciating marginally and going for GH¢12.10 to the dollar at the forex bureaus.
Its year-to-date depreciation is a little over 11%.