The Ghana cedi slipped in the last two weeks as the demand for foreign exchange builds amid external pressures.
The local currency depreciated modestly across both the interbank and retail forex markets, driven by a combination of domestic demand pressures and external factors.
On the interbank market, the local currency weakened by 1.55% against the dollar, 1.66% against the pound, and 0.90% to the the euro, closing at mid-rates of GH¢10.94 against US dollar, GH¢14.62 to the the pound and GH¢12.61 to the euro.
This trend was mirrored in the retail segment, where the cedi depreciated by 0.43% against the American greenback to GH¢11.60 and 1.62% against the pound to GH¢15.40, respectively. It remained broadly stable to the euro at GH¢13.45.
Analysts believe the recent depreciation reflects renewed forex demand from importers, elevated system liquidity, and rising oil prices, which are increasing the import bill.
Databank Research said the external backdrop remains a key driver, with higher crude prices posing upside risks to both the trade balance and inflation.
“At the same time, while gold prices had previously provided strong forex support, the recent pullback driven by signs of geopolitical de-escalation may reduce this buffer. On balance, we expect the cedi to maintain a mild depreciation bias in the coming weeks, with stability dependent on sustained FX [forex] inflows and evolving”, it added.
Meanwhile, the cedi began this week going for GH¢11.70 against one dollar in the retail market.
The year-to-date gain stood at 4.96%.
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Source: www.myjoyonline.com