The Ghana cedi recorded some gains last week against the US dollar and the other major foreign currencies after weeks of sustained depreciation.
This was buoyed by improved market liquidity.
The recovery came amidst resurfacing corporate demand pressure, largely due to seasonal demand ahead of the yuletide.
The Bank of Ghana (BoG) sold US$37 million during the 7-day forward auction while also auctioning US$20 million to the Bulk Oil Distributing companies.
Following BoG’s support, the cedi gained 0.46% week-on-week to the dollar. It ended the week trading at a mid-rate GH¢16.40 to one American greenback.
Additionally, it surged 0.47% week-on-week vs the pound and 0.56% week-on-week against the euro.
This week the US Federal Reserve is set to meet to decide the direction of the US policy rate.
As market expectations are building momentum towards a rate cut, analysts see room for the US dollar index to slide further as it lost about 100 basis points week-on-week to 101.114 points last week.
This move, coupled with the Bank of Ghana’s market intervention, should provide a cushion to the cedi’s performance this week.
Meanwhile the cedi begun this week going for GH¢16.41 to the dollar on the retail market.
It has since January 1, 2024, lost 25.81% to the American greenback.
Source: Joy Business