Ghana’s cedi is projected to stabilise within a relatively tight range in the coming weeks, with the local unit trading between GH¢11.67 and GH¢12.15 against the US$, according to the latest bi-weekly currency update from the research of local financial services provider, Databank.
The outlook, its analysts said, is on account of improving policy conditions, regulatory constraints on bank currency positions and an anticipated IMF disbursement to help anchor market sentiment.
“Looking ahead, we tip near-term stability of the US$/GH€ pair within the band of GH¢11.67 to GH¢12.15 in the retail market,” the report stated, citing the easing of seasonal pressures and the impact of ongoing foreign-exchange reforms.
The analysts added that “we foresee the likely IMF disbursement further tempering bearish expectations, reinforcing our near-term outlook.”
The projection follows a fortnight in which the cedi came under renewed seasonal pressure across both the interbank and retail markets.
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On the Ghana cedi interbank market
On the interbank market, the US$/GH¢ pair closed at GH¢11.41, up from GH¢11.12, representing a 2.54 percent depreciation over the period. The currency also weakened 3.87 percent against the Euro (€) to GH¢13.32 and 4.62 percent against the British Pound (£) to GH¢15.26.
Movements in the retail segment were more subdued. The US$/GH¢ rate slipped 0.41 percent to approximately GH¢12.05, while the cedi lost 0.94 percent of its value against the Pound and 1.08 percent against the Euro, closing near GH¢15.90 and GH¢13.95 respectively.
Databank attributed the recent weakness to typical end-year market patterns. The report noted that “seasonal demand pressures and moderated FX support tempered further gains of the local currency,” but added that market dynamics were more orderly than in past years.
“Despite the seasonal pressures, we note that volatility remained relatively contained, compared to historical overshoots, and we believe this can be attributed to robust FX supply and spot interventions,” the analysts said.
The update also highlighted the Bank of Ghana’s revised single-currency net open position limits as a significant factor constraining speculative positioning among commercial banks.
Databank observed that “low OMO yields could have incentivised banks to expand long FX positions, but the BoG’s revised single-currency Net Open Position limits (0% to -10%) constrain such positions, effectively curbing potential pressure on the local currency.”
The report shows that, despite the recent depreciation, the cedi remains stronger than its 12-month high of GH¢16.15 to the dollar recorded earlier in the year. Current retail-market levels in the GH¢12 region are closer to the currency’s one-year low of GH¢10.95, highlighting the progress made in stabilisation efforts during the year.
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