Cedi recovers slightly against dollar, others
The Ghanaian cedi showed signs of recovery against the US dollar and other major foreign currencies last week, buoyed by key developments in the country’s international debt restructuring and its ongoing program with the International Monetary Fund (IMF).
This positive trend followed the announcement that Ghana had secured a high participation rate from its Eurobond holders, paving the way to restructure $13 billion of its international debt. The debt restructuring process is critical to stabilizing the country’s finances and alleviating pressure on the local currency.
Additionally, on Friday, October 4, 2024, the IMF reached a Staff-Level Agreement with Ghana on its Extended Credit Facility (ECF) program. This development boosted market confidence, reflecting positively on the cedi’s performance.
As a result, the cedi appreciated by 0.09% week-on-week against the US dollar, closing at a mid-rate of GH¢16.19/$. The local currency also strengthened by 0.35% against the British pound and 0.28% against the euro during the same period. The momentum is expected to continue in the near term, with analysts projecting further gains for the cedi.
On the retail market, the cedi is currently trading at GH¢16.22 to the US dollar, placing the currency’s year-to-date depreciation at around 22%. Despite this depreciation, recent developments could provide much-needed relief. Pending approval from the IMF board, Ghana is set to receive $360 million in financing this week. This funding is expected to bolster the country’s foreign exchange reserves and reinforce supply-side interventions aimed at stabilizing the currency market. Analysts are optimistic that the injection of IMF funds and improved market sentiment could provide respite for the cedi in the coming weeks, offering a more stable outlook for the local unit.
