Accra:The Ghana cedi has weakened by more than one percent against the US dollar over the past two weeks, reflecting increased pressures from import demand and higher energy costs. This depreciation has pushed the currency's overall decline against the dollar to slightly above 11 percent for the year.
According to Ghana Web, the cedi's performance varied across different markets. In the interbank market, it depreciated by 1.42 percent against the dollar, with the exchange rate reaching GHS11.79. It also fell by 1.29 percent against the British pound, trading at GHS15.60, but appreciated by 0.35 percent against the euro, reaching GHS13.20.
In the retail market, the cedi saw a 1.45 percent decline against the dollar, averaging GHS12.10. However, it gained 0.47 percent against the pound and 0.55 percent against the euro, closing at GHS15.80 and GHS13.65, respectively.
The currency's performance is being influenced by pre-festive import demand and rising energy costs, which are straining the foreign exchange market despite occasional increases in dollar supply. Databank Research forecasts that foreign exchange sales by the Ghana Gold Board and interventions by the Bank of Ghana could offer temporary relief, potentially leading to a brief appreciation and stability over four to five days.
Databank further noted that the sustainability of any gains would hinge on whether foreign exchange inflows can meet seasonal import demand without affecting the central bank's reserve-accumulation goals. The firm expects the dollar to trade between GHS11.60 and GHS12.10, identifying GHS12.00 as a potential near-term ceiling. Additionally, further depreciation could occur if energy costs and import demand surpass the available foreign exchange support.
The cedi commenced the current week with a slight recovery, trading at GHS12.10 to the dollar at forex bureaux, but future performance will depend on the balance of foreign exchange inflows against demand pressures.