For the first time in several weeks, the Ghana cedi depreciated week-on-week against the US dollar and the other major foreign currencies in the retail market.
The local currency, the cedi, lost 3.52% against the dollar last week, 2.01% against the pound, and 3.08% against the euro, respectively.
It traded at a mid-rate of GH¢11.75 against the American greenback.
The weak performance of the cedi in the retail market last week was due to elevated demand pressures in the forex market.
However, the local unit strengthened slightly against the US dollar in the interbank market, appreciating by a modest 0.29% to close at a midrate of GH¢10.25 to one dollar.
Databank research believes the softer-than-expected May 2025 US labour data weighed on the dollar across major pairs, driving a modest cedi gain on the interbank market.
However, it pointed out that “Although renewed trade negotiations and tempered dollar sentiment may anchor cedi stability in the interbank market, intensifying forex demand from repatriation-related outflows is expected to exert pressure in the retail market”.
This could constrain broad-based cedi gains in the near term, despite relatively subdued sentiment in anticipation of the US$370 million International Monetary Fund (IMF) disbursement.
Meanwhile, the cedi began this week losing value slightly against the dollar.
It is going for GH¢11.60 to one American greenback in the retail market.
Its year-to-date appreciation, however, stands at 32.13%.
Despite Ghana’s significant export potential, especially in gold, oil, and cocoa, foreign exchange inflows have not kept pace with demand as the Cedi weakens against the dollar.
Additionally, uncertainty surrounding the timeline for IMF disbursements and donor support has dampened investor sentiment.
The Bank of Ghana has reiterated its commitment to stabilising the cedi, using a mix of monetary tightening and forex interventions.
The central bank assured the public that it has sufficient reserves to address short-term volatility while urging market players to avoid speculative activity.
