The Ghana cedi has returned to the depreciation trajectory despite
a strong performance in the first three-and-a-half months of this year.
As of 6 May 2020, the cedi had declined in value by 1.18% to trade at GHS5.600 to the US dollar on the interbank forex market and 2.36% to sell at GHS5.93 on the interbank forex market.
Currency analysts believe the active support of the Bank of Ghana
(BoG) on a daily basis has helped slow down the deprecation of the cedi despite
the gradual rebound of the global economy after some countries eased their
lockdown restrictions.
US$25 million was sold on the
forex forward market on Tuesday 5 May 2020.
Some sizable volumes were also
sold on the spot market Wednesday, 6 May 2020.
But the BoG’s daily interventions overall, appear to be keeping the USD/GHS range-bound at the moment.
Analysts further believe the risk is tilted to the upside for the
USD/GHS rate, particularly as coupon payment and dividend repatriation mounts,
amidst weak export receipts.
The Treasury’s external debt service
during the year is also another pressure point to watch.
Courage Martey of Databank
Research, however, told Class Business: “We also think the BoG would aim to
prolong the USD/GHS stay below the GHS6 psychological barrier for a while
longer, especially as political risks are expected to add to the shocks in the latter part of 2020.”
As of 18 March 2020, when the
coronavirus pandemic had begun causing some stir globally, the local currency
had appreciated by 3.47% to the US dollar, 13.38% to the British pound and
5.81% to the euro.
It traded at GHS5.34 to one the American dollar, GHS6.45 to one British pound, and GHS5.87 to the euro.
The cedi, however, ended the month of February 2020 with an appreciation of about 5.75% to the US dollar on
the interbank market.
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