The pace of the Ghana cedi depreciation eased over the past two weeks
The pace of the Ghana cedi depreciation eased over the past two weeks, with both interbank and retail markets recording modest dips.
In the interbank market, the US dollar cedi pair closed the fortnight at GH¢12.40 from GH¢12.15, marking a 2.02 per cent dip compared to 6.17 per cent recorded two weeks earlier.
In the retail market, the cedi remained range-bound between GH¢13.40 and GH¢13.50 against the US dollar, posting a 0.74 per cent decline from 6.72 per cent.
In parallel, the pound and euro closed at midrates of GH¢18.05 (-2.49 per cent) and GH¢15.70 (-1.59 per cent) from GH¢17.60 and GH¢15.70, respectively.
“We note that the slowdown in the cedi’s depreciation confirms our earlier expectations of stability, supported by stronger FX [foreign exchange] inflows and softer market sentiments.
“Looking ahead, we maintain a cautiously optimistic near-term outlook, with seasonal FX inflows from commodity exports expected to filter through”, Databank Research said in a report.
It acknowledged that heightened corporate demand, particularly from the services sector ahead of the festive season, may create upside risk.
However, it expects sustained forex support from the Bank of Ghana, underpinned by a strong reserve buffer and positive expectations around the International Monetary Fund’s fifth programme review to anchor its outlook.
In addition, the ongoing U.S. budget stalemate could sustain dollar softness, providing further support to the USD/GHS pair.
Meanwhile, the cedi began this week going for GH¢13.70 to the US dollar in the retail market.
Its year-to-date gain is 15.00 per cent to the American greenback.
In another development, the government missed its treasury bills target just a week after recording an oversubscription, as some investors continue to prefer fixed deposits and the Bank of Ghana bills.
According to auction results by the Bank of Ghana, the government recorded a 37 per cent undersubscription of the short term instruments.
The Treasury received GH¢3.486 billion of the total bids, but accepted GH¢3.463 billion.
A little over 76 per cent of the bids came from the 91-day bill.
About GH¢2.66 billion of the bids were tendered. The uptake was GH¢2.65 billion.
For the 182-day bill, GH¢705.7 million of the bids were tendered. The bids accepted were estimated to be worth GH¢695.3 million.
Similarly, GH¢119.5 million of the bids were tendered for the 364-day bill. About GH¢116.5 million of the bids were accepted.
Meanwhile, the yield on the 91-day bill increased by 5.0 basis point to 10.50 per cent.
That of the 182-day bill also shot up to 12.39 per cent from 12.36 per cent the preceding week.
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