The Ghana cedi s likely to endure depreciation pressures in the near term as the foreign exchange market still awaits news on the Debt Sustainability Analysis [DSA] conducted by the International Monetary Fund.
However, the syndicated loan of $1.13 billion signed last week is expected to bolster dollar supply and provide some reprieve to the local currency.
“The local unit [cedi] is likely to endure depreciation pressures in the near term as the market still awaits news on the DSA conducted by the IMF. The syndicated loan of $1.13 billion signed last week is expected to bolster FX supply and provide some reprieve to the cedi”, Databank Research said.
As portfolio outflows drained reserves, Ghana’s gross international reserves fell to 2.9 months of import cover. This is despite impressive earnings from exports of crude oil and gold.
In the bi-weekly Foreign Forward auction, the Bank of Ghana allotted $25 million. But the resultant bid-to-cover ratio was 4.01x, as demand continued to outstrip supply, albeit at a reduced rate.
It’s presently trading at about ¢11 on average at the forex bureaus.
Cedi loses 3.2% value to dollar last week
Last week, the cedi was relatively stable on the interbank market, trimming 0.34% vs the dollar, 0.02% against the pound, and 0.06% to the euro.
However, the local currency saw a sizeable depreciation in the retail market, shaving 3.23% to the greenback, 5.43% vs the pound, and 5.48% to the euro.
Some analysts are however hopeful the Finance Minister, Ken Ofori-Atta and his team who are in Washington, DC, will fast-track the economic programme that the country is seeking to have to address the current economic challenges, particularly the cedi.