The Ghanaian cedi’s steadiness against major foreign currencies is anticipated to persist this week, following a decline in demand for foreign exchange.
The local currency regained ground against the dollar, pound, and euro in the previous week.
It recorded a 1.01% increase against the US dollar, reducing its year-to-date depreciation to 18.01%. Similarly, the cedi recovered 2.36% and 3.12% against the pound and euro, respectively, on a week-on-week basis.
Gradually, the cedi is establishing stability against key trading currencies after enduring several challenging weeks.
The initiatives implemented by the Bank of Ghana have been instrumental in supporting the local currency.
Following the resolution of significant issues, Ghana and its official creditors concluded negotiations on the restructuring of the $5.4 billion debt.
The country is nearing the finalization of a memorandum of understanding with the creditors. This agreement will pave the way for approval from the International Monetary Fund (IMF) regarding the second review, leading to the release of $360 million under the $3.0-billion Extended Credit Facility (ECF) later this month.
Analysts anticipate that this injection of funds, combined with contributions from other multilateral partners, will enhance foreign exchange liquidity and contribute to the stability of the cedi.
Cedi still ranked 4th worst performing currency in Africa
In 2024, the cedi remains among Africa’s poorest performing currencies, as per Bloomberg’s rankings.
Bloomberg highlighted that the cedi has experienced approximately a 20.0% depreciation since the start of the year.
Samantha Singh-Jami, an African strategist at Rand Merchant Bank, linked the cedi’s decline to strong demand for dollars from oil importers, the pharmaceutical industry, and FMCG firms.
“Despite recent attempts to strengthen foreign exchange reserves, market liquidity constraints persist,” she remarked.
Currently, at the forex bureaus, one dollar is trading for roughly GH¢14.92.