The depreciation pressures on the cedi have slowed down as a result of improved foreign exchange (FX)liquidity, particularly the US dollar.
This follows significant intervention by the Bank of Ghana on the market last week, providing about $59 million on the spot market and auctioning $20 million to the Bulk Oil Distribution Companies.
The move by the Central Bank marked the most significant support provided in a week since the beginning of 2024.
Again, the FX liquidity provided the much-needed buoyancy to the cedi, keeping it afloat for most of last week.
However, the local unit retreated to losses on Friday, May 17, 2024, as corporate demand resurged.
Consequently, the cedi depreciated at a much lower by 0.84% week-on-week against the American greenback and 1.22% week-on-week vs the pound.
Conversely, the Cedi gained 2.80% week-on-week against the euro.
The year-to-date loss of the cedi is however 18.70%. It is going for GH¢15.20 to a dollar on the retail market.
Parliament of Ghana approved a $150 million World Bank’s International Development Association (IDA) loan last Friday, May 17, 2024, to finance the ongoing Greater Accra Resilient and Integration Development project.
Though the expected date of inflow is not stated, analysts believe access to this fund will be FX-supportive and provide some backing to the cedi.
This week, however, the local unit is expected to weaken slightly on strong demand for the dollar.
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