The Ghana cedi showed signs of recovery last week against the US dollar and other major foreign currencies after experiencing prolonged depreciation. This rebound was supported by improved market liquidity.
The cedi’s recovery occurred despite renewed corporate demand pressure, driven by seasonal demand leading up to the holiday season. The Bank of Ghana (BoG) played a role by injecting US$37 million through a 7-day forward auction, along with US$20 million sold to Bulk Oil Distributing companies.
As a result of BoG’s intervention, the cedi strengthened by 0.46% against the US dollar week-on-week, closing the week at a mid-rate of GH¢16.40 to one dollar. It also gained 0.47% against the British pound and 0.56% against the euro over the same period.
This week, the US Federal Reserve is scheduled to meet to decide on its interest rate policy. With market expectations leaning towards a potential rate cut, there is anticipation that the US dollar index could weaken further, having already lost around 100 basis points last week, settling at 101.114 points.
SOURCE: JoyBusiness
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