Cedi continues bearish run against the dollar
In a week marked by increasing headwinds for the Ghanaian Cedi, the currency continued its bearish trajectory against the US Dollar.
The Cedi’s vulnerability was evident as both the retail and interbank reference rates concluded the week, registering a significant depreciation of 0.8% and 0.7% against the greenback, respectively.
At the outset of the week, the USD to GHS pair opened at GH¢11.65/11.69 but gradually softened to GH¢11.75/11.80 by week’s end, signifying a year-to-date depreciation of 0.8% against the USD.
This depreciation can be attributed to a multitude of factors, including persistent demand from large corporate entities and Bulk Oil Distribution Companiess (BDCs). Their unrelenting pursuit of foreign exchange (FX) remained unabated throughout the week.
Despite the robust demand, the FX liquidity landscape remained parched, reflecting a conspicuous dearth of trading activity in the market.
The meager liquidity levels are symptomatic of the prevailing challenges in the Ghanaian economy, which has ramifications on the broader FX landscape.
Looking ahead, it appears that the pressure on the Cedi is poised to intensify as large corporates gear up for the yuletide season.
This seasonal surge in demand for FX, as they stock up on general goods, may contribute to a continuation of the Cedi’s bearish trend in the forthcoming weeks.
