Increased domestic demand and the strengthening of the US dollar globally are expected to weigh on the cedi this week as some analysts predict a marginal weakening of the local currency this week.
The dollar strengthened globally as the Fed intends to keep U.S. policy rates higher for a longer period.
Last week, the local currency lost marginally against the American greenback.
It tumbled as demand pressures continued to build up against the Bank of Ghana’s foreign exchange support.
The Central Bank held its bi-weekly foreign exchange auction for Bulk Oil Distributing Companies and provided $20 million.
Additionally, the Central Bank was active on the spot market, providing about $2 million in support to tame demand. However, these foreign exchange provisions could not hold up the cedi against the dollar.
Nonetheless, the local unit remained stable vs. the euro but closed 0.69% stronger against the pound in the retail market.
Meanwhile, analysts believe the disbursement of the cocoa syndication loan in December 2023 and the possible inflows from the Economic Credit Facility ($600 million) with the International Monetary Fund will cushion the cedi in the near term.
So far this year, the cedi has lost about 11.4% to the dollar in the retail market and about 22% on the interbank market.
Source: Ghana News