The Ghanaian cedi is under pressure due to strong demand for US dollars from the manufacturing, energy, and services sectors. According to LSEG data, the cedi traded at 12.50 to the dollar, a slight depreciation from the previous week’s close of 12.30 to the dollar.
Key Factors Contributing to Cedi’s Depreciation:
– Strong Dollar Demand: The manufacturing, energy, and services sectors are driving demand for dollars, putting pressure on the cedi.
– Central Bank Interventions: Despite sustained interventions by the central bank through its foreign exchange auctions, the cedi remains on a gradual depreciation path, according to Chris Nettey, head of trading at Stanbic Bank Ghana.
– Economic Factors: Ghana’s economy has been influenced by high global prices, which increased export revenues, and a surge in gold prices, which bolstered the cedi’s strength earlier in the year.
Market Outlook:
While some traders expect the cedi to remain stable, others predict further depreciation due to the strong demand for dollars. The cedi’s stability will likely depend on the central bank’s ability to manage dollar supply and demand.