Last week, the spot market saw a 3.88% decline in the value of the Ghana cedi relative to the US dollar, bringing its year-to-date depreciation to 21.20%.
This comes after the US dollar’s strengthening and a rise in the demand for foreign exchange among local corporations.
On June 18, 2024, it began the week, however, unchanged, selling at the forex bureaus for GH¢15.70.
Despite market forecasts for two rate cuts this year, the US Federal Reserve only signaled one. The American green back index shot up by almost 100 basis points per week as a result of this tight hold on monetary policy, sending the cedi plummeting against the main trade currencies.
Last week, the local currency lost 2.87% versus the euro and 2.43% versus the pound.
Nonetheless, a debt restructure was agreed upon by the Ghanaian government and its formal creditors.
It is likely that this will allow Ghana to get $360 million, subject to the IMF board’s approval at its meeting on June 28, 2024.
According to analysts, this will strengthen foreign exchange buffers, enhance FX liquidity, and contribute to the short-term stabilization of the declining cedi.
The local currency is likely to move sideways this week, meanwhile, as a result of the dollar’s strengthening and the ongoing need for foreign exchange.
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