Rising FX demand from large corporates, energy sector pressures local currency
In the midst of mounting corporate FX demand pressures, the Cedi has faced a recent bout of weakening, according to analysis from GCB Capital Research.
The local currency has come under considerable strain against the US Dollar, primarily attributed to an uptick in FX requirements over the past fortnight.
This heightened demand emanates from major corporate entities and the energy sector, spurred by the maturation of Letters of Credit (LCs).
The Cedi experienced a depreciation of 0.9% against the USD across both interbank and retail markets during the previous week.
Opening the trading week at approximately GH¢11.65 to GH¢11.69 per US Dollar, it succumbed to a decline amidst limited foreign exchange offerings.
Notably, the Bank of Ghana took action by intervening in the market, injecting around US$2.5 million at exchange rates hovering between GH¢11.6 and GH¢11.65.
While the recent Staff-Level Agreement regarding the first review of the IMF program has lent some support to the Balance of Payments (BoP) outlook, there remains a cloud of uncertainty.
Delays in sealing a Memorandum of Understanding (MOU) with official creditors have cast a shadow over the near-term exchange rate outlook, particularly given the potential seasonality pressures on the horizon.
These dynamics underscore the delicate balancing act the country face in stabilizing the currency amid evolving economic circumstances.
