The Cedi is facing mounting pressure as it now trades at GHS 12.10 against the US dollar on the forex or retail market. This rate has exceeded the expectations of many analysts and research institutions, who had predicted an average year-end rate of GHS 11.60 against the American greenback.
Reports indicate that at the various forex bureaux, the demand for the US dollar is soaring, a trend observed two months ahead of the Christmas season. Local corporates and importers are contributing significantly to this surge in foreign exchange demand in anticipation of the festive season.
Despite the recent interventions by the Central Bank, which included the auctioning of $20 million to Bulk Oil Distribution Companies and $2 million for spot market interventions, analysts remain skeptical about the adequacy of these measures to alleviate the persistent demand for foreign currency.
In the previous week, the Cedi experienced a 0.17% depreciation against the US dollar, closing at GHS 11.84. Furthermore, it depreciated by 0.86% against the British pound and 0.60% against the euro on the retail market.
On the interbank market, the Cedi’s performance was rather mixed. It exhibited a 0.73% week-on-week depreciation against the US dollar, while making a marginal gain of 0.06% against the euro. Stability was maintained in relation to the British pound.
However, the question looms as to whether the recent depreciation of the Cedi against major foreign currencies may continue in the coming weeks. All eyes are now on the expected inflows of $600 million from the International Monetary Fund in November 2023, with hopes that these funds may help ease the mounting pressure on the Cedi.