The Ghana cedi fell last week after a stable performance the previous week against other major currencies.
Corporate demand pressures have resurfaced, leading to a decline in the Ghana cedi.
The local currency depreciated by 1.48% against the US dollar last week, ending at GH¢15.75/16.00 on the retail market.
Similarly, it fell 2.80% against the British pound and 2.18% against the euro.
Ghana’s refined oil imports rose to US$428.3 million in June 2024, up from US$422.6 million in May 2024, driven by increased demand from oil importers.
The central bank intervened by selling US$40 million to oil importers through the Bulk Oil Distributors Foreign Exchange (FX) auction.
Despite this, persistent demand from oil importers has contributed to a 4.46% month-on-month depreciation of the cedi against the US dollar in June 2024.
Analysts view the rising oil import bill and the resulting increase in FX demand as significant risks to Ghana’s net foreign reserves, likely putting near-term pressure on the cedi.
They anticipate that the local currency will continue to weaken this week due to escalating corporate demand pressures.
Currently, the cedi is trading at GH¢15.88 to the US dollar on the retail market.
The Bank of Ghana reports that the Ghana cedi depreciated by approximately 19.6% against the US dollar on the interbank forex market as of July 2024.
This figure is lower than the roughly 21% decline observed in the retail market.
The Central Bank’s July 2024 Summary of Financial and Economic Data reveals a pattern of ongoing depreciation: the cedi fell 7.7% against the dollar in March 2024, 10.5% in April 2024, 15.9% in June 2024, and 18.6% in July 2024.