The local currency showed stability in the retail market last week, though it experienced pressure in the interbank market due to renewed forex demand from traders and the manufacturing sector in anticipation of the upcoming festive season. Retail rates against the euro and pound remained unchanged, closing at mid-rates of GH¢18.03/€ and GH¢21.35/£, respectively.
However, the cedi appreciated marginally by 0.93% against the US dollar, with the mid-rate rising to GH¢16.20/US$, up from GH¢16.35/US$ the previous week. Analysts suggest that the cedi’s stability in the retail market indicates improved forex inflows and a decrease in speculative demand, as the market awaited the Monetary Policy Committee’s briefing on September 27, 2024.
Following a 200-basis point cut in the policy rate to 27% from 29%, and assurances from Bank of Ghana (BoG) Governor Dr. Ernest Addison regarding the bank’s capacity to meet forex demands, the dollar-cedi rate is anticipated to remain relatively stable amidst reduced speculation.
Moreover, the recent update to the methodology for calculating the BoG’s Foreign Exchange Market Reference Rate (MRR), which enhances forex data coverage, is expected to reduce short-term volatility, even with rising demand ahead of the festive season.
As of September 2024, the Ghana cedi has depreciated by 24.3% against the US dollar in the interbank forex market, as reported by the Bank of Ghana in its Summary of Economic and Financial Data. This depreciation is lower than the 22.9% recorded during the same period last year. Notably, the cedi lost 7.7% in value to the dollar in March 2024 and experienced an 18.6% depreciation in June 2024.
Source: DEW360.NET
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