The Ghana cedi is recovering modestly on external tailwinds and sentiment.
Over the past fortnight, the cedi encountered mild demand-driven pressures in the opening week, as anticipated.
However, it clawed back losses in the latter half as broad-based “sell America” sentiment underpinned external support.
In the interbank market, the cedi appreciated by 0.09% against the US dollar, 0.86% against the pound sterling, and 1.16% against the euro, closing at mid rates of GH¢10.97 to the US dollar, GH¢14.81 to the pound and GH¢12.93 to the euro.
The positive momentum filtered through to the retail segment, where the currency strengthened by 0.6% against the US dollar, 1.29% against the pound sterling, and 1.11% against the euro. It settled the period at mid-rates of GH¢11.63/US dollar, GH¢15.55/pound and GH¢13.50/euro.
“We concur that the cedi’s recent appreciation mirrors gains across other major Sub-Saharan African (SSA) currencies, highlighting broad-based external support from sustained US dollar weakness”, said Databank Research.
In the near term, it expects these tailwinds to drive further cedi strength as expectations of continued US dollar softness moderate demand for the greenback, amid heightened risks of a potential Iran confrontation.
“Supported by targeted forex intervention from the Central Bank through a US$1.0 billion facility gradually deployed to meet market demand, we anticipate the cedi’s gains extending to an interbank mid-rate range of GH¢10.85 – GH¢10.95/US dollar over the next fortnight. Retail rates should align around GH¢11.55-11.60/US dollar, with scope for tighter spreads if inflows accelerate.
Meanwhile, the cedi began this week going for GH¢11.70 in the retail market.
Its year-to-date gain stood at 4.95% to the American greenback.
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Source: www.myjoyonline.com