Cedi Depreciates By 1.22% Against Dollar

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The Ghanaian cedi experienced a 1.22% depreciation against the US dollar in the retail market over the past week, accentuated by existing depreciation pressures. This downward trend extended to other major currencies, with the cedi losing 0.65% to the pound and 0.19% against the euro, despite a noteworthy decrease in Ghana's inflation to 23.2% as reported in December 2023.

Related To This: CEDI CRISIS: Cedi Depreciates As $1 Equals ¢12.13

Despite efforts by the Central Bank, which auctioned off 20 million dollars to the Bulk Oil Distribution Companies in the first sale of 2024, the persistent corporate demand continued to exert influence. This resulted in the cedi closing at GH¢12.33/$ in the retail market or forex bureaus, marking a contrast to its previous rate of GH¢12.18/$.

In anticipation of the International Monetary Fund's (IMF) expected inflow of $600 million after the board's approval of the first review of Ghana's program slated for January 19, 2024, many analysts believe this development will likely uplift market sentiments. Such anticipated funds are expected to bolster foreign exchange reserves and reinforce supply-side interventions, potentially providing stability to the currency.

Moreover, the government's recent debt restructuring agreements with official creditors, reached on January 12, 2024, are viewed as a critical step in Ghana's economic recovery, infusing a sense of optimism for the country's financial outlook.

Related To This: Expected Depreciation Of Cedi Against US Dollar As Foreign Exchange Demand Rises

Despite these potential remedial measures and positive developments, the local currency has witnessed a 1.50% depreciation against the dollar in the retail market since the start of the year. 

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