The cedi suffered significant losses across both the interbank and retail markets last week, driven by strong demand for foreign currency and limited supply of foreign exchange.
On the interbank market, the cedi depreciated by 6.58% against the US dollar, 6.20% against the British pound, and 6.51% against the euro, closing the week at GH¢11.40, GH¢15.40, and GH¢13.34, respectively.
In the retail market, the local currency declined by 5.80% against the dollar, 5.44% against the pound, and 4.53% against the euro, with average mid-rates ending at GH¢12.50/USD, GH¢16.55/GBP, and GH¢13.35/EUR.
On a monthly basis, the cedi lost 7.89% of its value against the dollar.
This sharp drop has eroded the year-to-date appreciation of the currency, reducing gains from 40% in July to 28.95% by the end of August.
According to Databank Research, the cedi’s decline aligns with expectations, citing strong corporate demand, limited foreign exchange support, and the global strength of the US dollar as key drivers of the depreciation.
“Tighter regulations and weak forex inflows further amplified the downward pressure,” the report stated.
Looking ahead, Databank warned that pressure on the cedi could intensify as importers increase dollar demand ahead of the festive season.
While the Bank of Ghana has introduced measures to curb forex leakages, the report noted that these policies may take time to yield results.
“A rebound by mid-September will depend on stronger FX inflows, including the anticipated US$4 billion for cocoa purchases, as well as the possibility of a U.S. Federal Reserve rate cut,” the report added.
As of the start of this week, the cedi remained steady against the dollar, trading at a mid-rate of GH¢12.50.
