Cedi to remain under pressure for most part of this week; one dollar going for GH¢16.55

The Ghana cedi is expected to remain under pressure for the most part of this week as the strong demand for foreign exchange continues to persist.

This is in spite of Ghana making strong progress under the International Monetary Fund (IMF) Economic Credit Facility programme.

Last week, the local unit continued to depreciate against major currencies as both offshore and local demand rose.

In an effort to manage the demand, the Central Bank accepted all bids totaling US$89.3 million during the week through the 7-day foreign exchange auction.

However, the auction proved insufficient as the cedi lost 1.06% week-on-week to trade at a mid-rate of GH¢16.55 to one US dollar. The local unit also declined by 0.23% week-on-week and 0.28% week-on-week vs the pound and the euro.

It started the week going for GH¢16.65 to one American greenback after losing marginal grounds.

Since the beginning of the year, the local currency has lost over 26% in value to the dollar, placing it among the three worst performing currencies in the Sub Saharan Africa.

Looking ahead, the Central Bank plans to auction US$20 million to the Bulk Oil Distribution Companies (BDCs) this week.

While analysts believe the action may help address some demand, they expect the cedi to remain under pressure for the most part of this week as the strong foreign exchange demand continues to persist.