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The Ghana cedi has reached a new milestone, hitting GH¢16 to a dollar on the retail market after a period of relative stability. This rate is now the average selling price at most forex bureaus, indicating that depreciation pressures on the cedi are still present.
Financial Analyst Professor Williams Peprah, in an interview with JoyBusiness, advised against panic, suggesting that this could be a temporary fluctuation due to a weekend bump. He expressed optimism that the market might correct itself soon and expects the cedi to hold steady at GH¢15.90 until November 2024, when the Christmas season approaches.
This development coincides with the International Monetary Fund lifting restrictions on dollar auctions by the Bank of Ghana, following a strong reserve build-up under a $3 billion economic recovery program. Analysts believe this move could further strengthen the cedi.
Cedi’s Half-Year Performance
The Bank of Ghana’s July 2024 Summary of Financial and Economic Data revealed that the cedi depreciated by about 19.6% against the US dollar on the interbank forex market as of July 2024. This was slightly better than the approximately 21% depreciation on the retail market.
The data showed that the cedi lost 7.7% of its value against the dollar in March 2024, 10.5% in April 2024, and further depreciated by 15.9% and 18.6% in June and July 2024, respectively.
Currently, the cedi is trading at GH¢15.60 on average against the dollar on the retail market, while the Bank of Ghana quotes one dollar at GH¢14.78. Against the British pound, the cedi has depreciated by 20.8%, trading at GH¢19.10, and it has lost 18.4% in value against the euro, selling at GH¢16.09.
Market Outlook
Despite the recent depreciation, the cedi had shown signs of stabilization against the dollar two weeks ago, driven by rising corporate demand. The market’s anticipation of a potential rate cut by the US Federal Reserve has also contributed to the weakening of the American greenback.
