Cedi records mixed performance as interbank losses offset retail gains

The Ghana cedi posted a mixed performance over the two-week review period, slipping slightly in the interbank market while gaining strength in the retail segment.

In the interbank market, the US dollar/cedi midrate rose to GH¢10.88 from GH¢10.70, indicating a mild depreciation of the local currency. However, the cedi strengthened against the pound and the euro, which declined by 2.70% and 2.57% to close at GH¢14.78 and GH¢12.80, respectively.

By contrast, in the retail market, the dollar strengthened marginally against the cedi, with the rate moving to GH¢11.90 from GH¢12.15. The pound and euro, however, appreciated by 1.58% and 2.18% to settle at GH¢15.80 and GH¢13.75, respectively.

Commenting on the trend, Databank Research noted that renewed demand outstripping forex supply led to modest cedi losses in the interbank market, while softer retail demand prompted slight price adjustments. The firm forecast a stronger cedi over the next two weeks, supported by expected forex inflows to ease negative market sentiment.

On the global front, Databank Research said shifting capital flows and expectations of continued US dollar weakness, alongside prospects of a dovish Federal Reserve, support its outlook of a GH¢10.70 per dollar base case.

Meanwhile, the cedi opened trading this week at GH¢12.00 to the US dollar and has recorded a year-to-date appreciation of 1.88%.