The Ghanaian cedi's depreciation against the US dollar continues its upward trajectory in the commercial forex market, nearing a 10% loss in value for the first four months of 2024.

Since the year's commencement, the cedi has undergone marginal depreciation, marking a year-to-date decline of around 9.37%. This represents a notable decrease from the 22.73% depreciation noted as of April 2023.

In practical terms, commercial banks now list the exchange rate of the cedi to the dollar at an unprecedented GHS 13.055 per dollar, compared to GHS 11.55 in the corresponding period last year.

Data from the two-week average Bank of Ghana interbank USD/GHS rate reveals a 1.69%, 0.98%, and 1.77% depreciation for January, February, and March 2024, respectively.

This trend persists despite fresh dollar inflows and forex auctions to Bulk Oil Distribution Companies (BDCs) by the Bank of Ghana.

Some analysts foresee a potential reversal of the cedi's decline in the first half of the year, while others express concerns that its performance could contribute to an inflationary uptrend.

To stabilize the cedi, the Bank of Ghana plans to auction $120 million to BDCs in the second quarter of 2024. However, ongoing demand for dollars by businesses may pose challenges to this endeavor.

Despite maintaining the policy rate at 29%, with lending rates averaging over 32%, apprehensions linger regarding the broader ramifications of currency volatility.

Nonetheless, Dr. Ernest Addison, Governor of the Bank of Ghana, remains optimistic, stating at the last Monetary Policy Committee meeting that the cedi is expected to maintain relative stability against the US dollar.

He attributed this to robust reserves bolstered by improved remittance inflows anticipated in the upcoming months.