The pace of the Ghana cedi depreciation eased over the past two weeks, with both interbank and retail markets recording modest dips.
In the interbank market, the US dollar cedi pair closed the fortnight at GH¢12.40 from GH¢12.15, marking a 2.02% dip compared to 6.17% recorded two weeks earlier.
In the retail market, the cedi remained range-bound between GH¢13.40 and GH¢13.50 against the US dollar, posting a 0.74% decline from 6.72%. In parallel, the pound and euro closed at midrates of GH¢18.05 (-2.49%) and GH¢15.70 (-1.59%) from GH¢17.60 and GH¢15.70, respectively.
“We note that the slowdown in the cedi’s depreciation confirms our earlier expectations of stability, supported by stronger FX [foreign exchange] inflows and softer market sentiments. Looking ahead, we maintain a cautiously optimistic near-term outlook, with seasonal FX inflows from commodity exports expected to filter through”, Databank Research said.
It acknowledged that heightened corporate demand, particularly from the services sector ahead of the festive season, may create upside risk.
However, it expects sustained forex support from the Bank of Ghana, underpinned by a strong reserve buffer and positive expectations around the International Monetary Fund’s fifth programme review to anchor its outlook. In addition, the ongoing U.S. budget stalemate could sustain dollar softness, providing further support to the USD/GHS pair.
Meanwhile, the cedi began this week going for GH¢13.70 to the US dollar in the retail market.
Its year-to-date gain is 15.00% to the American greenback.
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