Steady Start for Cedi in 2024; Maintains ¢12.20 Against the Dollar Amidst Market Shifts

During the initial week of 2024, the Ghanaian cedi exhibited unwavering stability against the US dollar, retaining its position at an exchange rate of ¢12.20. This consistency was mirrored across both the retail and interbank markets, where the cedi sustained its value against the dollar.

However, the cedi experienced marginal declines against other major currencies, witnessing a 0.49% decrease against the pound and a 0.56% dip against the euro on a week-on-week basis. Last week, the foreign exchange market encountered reduced liquidity levels following a temporary pause in supply-side interventions by the Bank of Ghana.

Nevertheless, corporate demand remained elevated post the festive season, maintaining market activity. A significant development emerged as Ghana and its bilateral creditor committee convened on Monday, January 8, 2023.

The outcome of this meeting holds pivotal importance, as a positive conclusion could pave the way for Ghana to receive anticipated inflows amounting to $1.15 billion from the International Monetary Fund and World Bank. This potential injection of funds may alleviate pressure on the Ghanaian cedi.

Looking ahead, analysts anticipate the first foreign exchange auction of 2024 for the Bulk Oil Distribution Companies (BDCs) scheduled for this week. This anticipated auction is expected to provide support to the Ghanaian cedi amidst evolving market dynamics and potential currency fluctuations.