Dollar demand outstrips supply by $79.75m in forex auction; high demand to deepen cedi depreciation woes
Demand for the greenback by banks, Importers and exporters and other businesses, surpassed that supplied by the Central Bank in the apex bank’s forex auction on Tuesday.
Demand for the greenback outstripped BoG’s supply by some $79.75m, as the BoG was able to only make available $25m as against the demand of $104.75m.
The inability of the Central Bank to meet the dollar demand by businesses, is indicative of the scarcity of the greenback in the economy given the huge fall in the BoG’s dollar reserves.
The oversubscription of the forex auction by the BoG and huge demand for the dollar could be that businesses (particularly importers) need to start placing orders and making payments for goods to be imported for the Christmas festivities.
For speculators, there is the need to buy and hold the dollar, in further anticipation that the cedi will continue to fall against the dollar.
The high demand for the dollar as reported by the BoG in its forex auction, is expected to put pressure on the cedi and cause it to depreciate against the American dollar.
Presently, the cedi “boasts” a 45 percentage points year-to-date depreciation rate against the dollar, now nearing almost GHS 13 to $1.
Bids were made for the 7 day, 15 day, 30 day and 45 day tenors.
Total bids submitted for the 7 day tenor amounted to $53.5 million of which the BoG accepted $12.25 million.
For the 15 day, 30 day and 45 day tenors, bids made totaled $34.75 million, $13.25million, $2.75 million and $500,000 respectively.
The BoG, for the 15 day, 30 day and 45 day tenors accepted bids totaling $7.5million, $3.5 million, $1.25 million and $500,000 respectively.
No bids were made for the 75 day tenors.
