In the aftermath of a steady performance the week before, the Ghanaian cedi experienced declines last week due to renewed corporate demand pressures.

The local currency fell by 1.48% week-on-week against the US dollar, ending at a bid to offer rate of GH¢15.75/16.00 on the retail market.

The cedi also weakened by 2.80% against the British pound and 2.18% against the euro.

Increased demand from oil importers led to a rise in refined oil imports, reaching US$428.3 million in June 2024, up from US$422.6 million in May 2024.

The Bank of Ghana sold US$40 million to oil importers through the Bulk Oil Distributors Foreign Exchange (FX) auction to address this demand. However, ongoing demand from oil importers resulted in a 4.46% month-on-month depreciation of the cedi against the US dollar in June 2024.

Analysts view the higher oil import bill and increased FX demand as threats to net foreign reserves, with short-term pressure likely on the cedi.

They anticipate the currency will continue to weaken this week due to rising corporate demand pressures. Currently, the cedi is trading at GH¢15.88 to the US dollar on the retail market.

The Bank of Ghana reports that the cedi has depreciated by approximately 19.6% against the US dollar on the interbank forex market as of July 2024, compared to about a 21% decline on the retail market.

The Central Bank’s July 2024 Summary of Financial and Economic Data indicates that the cedi lost 7.7% of its value against the dollar in March 2024, 10.5% in April 2024, 15.9% in June 2024, and 18.6% in July 2024.