The Ghanaian cedi experienced a significant depreciation of 2.94% against the US dollar last week, marking its steepest decline since the start of the year.
This dip has pushed its year-to-date loss to 3.87% as of January 2025.
The primary factors contributing to this downturn are continued demand pressures from key sectors, particularly manufacturing and energy, both of which have been heavily reliant on foreign exchange to fuel operations.
Mon 20 Jan, 2025 • 02:00 PM
💵 1 USD = ₵16.20 🔽
💷 1 GBP = ₵19.60 🔽
💶 1 EUR = ₵16.60 🔽Change money now at these rates (link below)
— CediRates (@CediRates) January 20, 2025
Further exacerbating the situation was the Bank of Ghana’s auctioning of US$20 million to the Bulk Oil Distribution Companies (BDCs), which added to the strain on the local currency.
As a result, the cedi traded at a mid-rate of GH¢16.15 to one US dollar by the end of the week. This marked the sharpest loss in value since the beginning of the year.
The cedi also saw a decrease against other major currencies, shedding 0.52% week-on-week against the British pound and 1.52% against the euro, indicating broad-based weakness in the currency’s performance.
As the new week begins, the cedi has remained largely unchanged against the US dollar and other major currencies, with one dollar currently trading at GH¢16.40.
Looking ahead, analysts are cautiously optimistic that the local currency may experience relative stability this week.
Much of this outlook hinges on global developments, including the inauguration of US President-elect Donald Trump and the subsequent policy announcements that are expected to influence market sentiment.
Additionally, key macroeconomic data from the US are due for release this week, which could further impact global financial markets and, by extension, the cedi’s performance.