Cedi resumes depreciation as demand for dollar surges; one dollar equals GH¢16.40

The Ghana cedi lost a marginal value to the US dollar increasing its year-to-date loss to about 26%.

This was due to the heightening of corporate demand and the recent Eurobond coupon payments.

The Central Bank held a 7-day FX auction, accepting all the $51.4 million bids submitted on the day.

The auction failed to keep the local unit stable as the local unit shed 0.15% week-on-week against the US dollar to close the week’s trading at a mid-rate of GH¢16.38/$.

It also depreciated by 0.24% and 0.70% week-on-week vs the pound and euro.

Presently, the cedi is going for GH¢16.40 to one American greenback at the foorex bureau or the retail market.

Last week, the Government of Ghana resumed its Eurobond debt service following the successful completion of the debt rework with its international bondholders.

A total of $520 million, including a $120 million consent fee was paid to investors as part of the restructuring agreement.

The government also disbursed some $320 million to investors as coupons due in 2022 but postponed during the debt rework processes.

Concerns about the sustainability of the country’s foreign exchange buffers resurfaced as the government looks forward to fully resuming Eurobond debt service in January 2025.

Analysts believe these concerns may have contributed to the cedi’s depreciation last week and may continue to negatively impact it in the coming weeks.