Cedi gains in retail market, slips on interbank
The Ghana cedi showed a mixed performance against major currencies last week, appreciating modestly in the retail market while weakening on the interbank market.
Trading results indicated that the local unit gained 1.06 percent against the US dollar in the retail market, where it was quoted between GHS11.40 and GHS11.90 to the dollar.
This leaves its year-to-date appreciation at 31.85 percent, cementing its place among the world’s best-performing currencies in 2024.
The cedi also registered gains against the British pound, firming by 0.64 percent to close at GHS15.65 per pound.
However, it slipped by 0.73 percent against the euro to close at GHS13.70 per euro, reflecting ongoing volatility across the foreign exchange market.
On the interbank market, the performance diverged. The currency depreciated by 1.41 percent to close at GHS10.65 to the US dollar, compared to GHS10.80 earlier in the fortnight.
Analysts attribute this to sustained corporate demand pressures coupled with limited foreign exchange support.
“In line with our expectations, the cedi posted modest stability on the interbank market, firming from GHS10.80 to GHS10.65 amid renewed corporate demand pressures and thin FX support,” Databank Research noted in its weekly update.
The report added that while the retail market benefited from quote shading by sellers, demand pressures kept the cedi largely range-bound.
“The quote shading cushioned the cedi, yielding modest fortnight-end gains despite underlying demand pressures,” the analysts explained.
Looking ahead, Databank expects the local currency to face renewed pressure against the US dollar in the near term.
This is due to a likely shift in global investor sentiment as geopolitical tensions ease and the CBOE Volatility Index (VIX) stabilises, which could redirect flows from gold and emerging market currencies into US dollar-denominated assets.
Meanwhile, the cedi began trading this week, 18 August 2024, unchanged at GHS11.90 to one US dollar in the retail market.
