The Ghana cedi has lost 2.2% in value to the dollar since January 2024.
This is despite the existence of the International Monetary Fund (IMF) programme which the Board approved the first review programme last Friday, January 19, 2023.
Last week, the local currency ceded its ground to the major trading currencies due to a stronger US dollar irrespective of some foreign exchange liquidity injection. The US dollar index closed 100 basis points stronger to 103.24 after the release of robust US Economic data, suggesting that the Fed will be slow in cutting policy rates.
The Bank of Ghana’s $11.6 million spot market support failed to cushion the cedi as it ended the week’s trades 1.60% weaker to a mid-rate of GH¢12.53/$ on the retail market.
The local currency also dipped 1.12% and 1.11% week-on-week against the pound and the euro on the retail market.
However, analysts expect improved investor sentiment, following the expected inflow of the $600 million bailout package and other budgetary support from the World Bank to help tame the depreciation of the cedi.
Despite the prevalence of corporate demand, they believe forex market sentiment would improve as the cash inflow from the IMF and the World Bank should help increase supply-side intervention and cushion the cedi in the near term.
Meanwhile, the cedi started strongly this week, presently going for GH¢12.43 to one US dollar.
Ghana agrees with bilateral creditors to restructure $5.4bn
Ghana successfully agreed on terms with bilateral creditors on January 12, 2024, to restructure $5.4 billion debt with the Official Creditor Committee.
The World Bank confirmed that the debt rework has unlocked a release of $300mn in budget support from the IDA, which will be considered by the executive board this week.
Source: Myjoyonline
