In the latest report from GCB Capital Research, the Ghanaian Cedi faced some downward pressure against the US Dollar (greenback) last week due to tightening foreign exchange (FX) liquidity conditions.
The Cedi weakened against the USD in both the interbank and retail market segments, reflecting the relatively constrained FX liquidity situation.
At the beginning of the week, the exchange rate stood at GH¢11.45/11.55. As the week progressed, both bids and offers in the market inched higher, reaching GH¢11.50/11.60 by midweek.
However, the Cedi managed to strengthen slightly towards the end of the week, closing approximately 0.5% lower with a quoted rate of GH¢11.45/11.52 at the week’s end.
The interbank reference market also followed these trends, with the USDGHS midrate ending the week 0.1% weaker, marking a year-to-date decline of 22.2%.
To address the rising demand pressures, especially from local businesses, the Bank of Ghana (BoG) intervened in both the spot and forward FX markets during the week. These interventions provided some relief to the tightening liquidity conditions.
While market sentiments seem to be relatively stable in anticipation of the first review of the IMF program, it’s worth noting that if FX liquidity constraints persist, it could lead to more significant fluctuations in the exchange rate in the coming weeks.
Ashantibiz
