Cedi continues his losing streak; depreciates by about 17% against the dollar

The Ghanaian cedi will continue to lose ground against major trading currencies this week due to continued business demand.

These are the views of some currency analysts and traders who spoke on condition of anonymity.

According to them, the Cedi’s poor performance is due to both endogenous and exogenous factors, such as a rising US dollar against emerging market currencies.

Inflation in April 2024 fell from 25.8% to 25% on an annual basis in March 2024. The cooling of inflation was supported by a decline in food inflation to 26.8%.

Some analysts believe that upside risks to inflation, which could lead to further headline increases, could fuel more speculative demand for the U.S. dollar and push the Cedi, one of the world’s worst-performing currencies this year weaken.

In addition, the US Federal Reserve will release April 2024 inflation this week, which could indicate the Fed’s policy rate path at its June 24, 2024 meeting. Current US data also shows that unemployment benefits claims data was released last week rose to the highest level in eight months.

These developments point to declining consumer demand, which could be the result of a tight labor market and therefore reduce inflation. This will ease the cedi’s woes a little.

Cedi depreciates by 17.32% against the dollar

Despite the Central Bank selling an estimated $23 million on the spot market last week, the local currency suffered a sharp depreciation against major trading currencies.

In the private foreign exchange market, the cedi fell 2.89% week-on-week against the dollar (-17.32% year-to-date) and closed weaker against the euro (-3.52% week-to-date) on-week; -15.20% year-on-year). -to-date) and pound (-3.03% week-on-week; -16.63% year-to-date).

The cedi is currently selling for GH¢14.90 at the forex agency. However, the Bank of Ghana is trading at one US dollar to GH¢13.01.

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