Cedi to face further decline this week amid corporate demand

The cedi is expected to depreciate further against major trading currencies this week due to persistent corporate demand.

According to Joy Business, the cedi's weakening performance is attributed to both internal and external factors, including the strengthening of the US dollar against Emerging Markets currencies. Despite April 2024 inflation easing to 25% year-on-year, down from March's 25.8%, concerns remain about

Read full articlepotential upward risks to inflation.

Analysts suggest that such risks could drive speculative demand for the US dollar, exacerbating the cedi's downward trend. The impending announcement of April 2024 inflation by the US Federal Reserve, along with recent data showing an increase in unemployment benefit claims, further contribute to market uncertainties.

However, there are indications of softening consumer demand in the US, potentially stemming from a tight labor market, which may mitigate inflationary pressures and provide some relief to the cedi.

Despite efforts by the Central Bank, which reportedly sold around $23 million on the spot market last week, the cedi continues to depreciate sharply against major currencies. In the retail foreign exchange market, the cedi recorded week-on-week declines of 2.89% against the dollar, 3.52% against the Euro, and 3.03% against the pound.

Currently trading at GH¢14.90 at forex bureaus, the Bank of Ghana quotes one US dollar at GH¢13.01.