Ghanaian Cedi Records 1.22% Depreciation Against the US Dollar Despite Inflation Dip

In the retail market last week, the Ghanaian cedi experienced a 1.22% depreciation against the US dollar, reflecting ongoing pressures on its value. Additionally, the local currency saw a 0.65% decline against the pound and a 0.19% decrease against the euro in the retail market, even as Ghana’s inflation eased to 23.2% in December 2023.

Despite the Central Bank’s auction of $20 million for Bulk Oil Distribution Companies in the first sale of 2024, corporate demand persisted, and the cedi concluded trades on the retail market or forex bureaus at GH¢12.33/$ compared to GH¢12.18/$ the previous week.

Analysts, however, remain optimistic about the potential improvement in market sentiments with the anticipated $600 million inflows from the International Monetary Fund (IMF). The IMF board is set to approve the first review of Ghana’s program on January 19, 2024, which is expected to bolster foreign exchange reserves and enhance supply-side intervention.

Furthermore, the Ghanaian government’s recent debt restructuring agreements with official creditors, finalized on January 12, 2024, are viewed as a positive step toward the country’s economic recovery. Despite the cedi losing approximately 1.50% of its value against the dollar in the retail market this year, these developments are anticipated to contribute to a more stable economic environment.

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