The Cedi has breached the GH¢16 threshold against the US Dollar on the currency retail market, underscoring the continued depreciation of the local currency amidst mounting economic challenges.
Forex bureaux and banks in the capital, Accra, have revealed that the dollar is now being traded at rates between GH¢15.95 and GH¢16.20.
The depreciation of the cedi follows the International Monetary Fund’s (IMF) decision to lift restrictions on dollar auctions conducted by the Bank of Ghana, a move made possible by a notable increase in the nation’s foreign reserves under the Fund’s $3 billion economic recovery programme.
According to the Bank of Ghana’s July 2024 Summary of Financial and Economic Data, the Cedi has depreciated by approximately 19.6% against the dollar on the interbank market this year, with the decline in the retail market slightly steeper at 21%.
Forex bureau operators in the capital have cited the challenging economic environment and recent regulatory changes—such as the Bank of Ghana’s mandate requiring Ghana cards for transactions—as contributing factors to the Cedi’s slide.
Bernice Arthur, a forex bureau operator, noted the strain on businesses trying to balance competitive rates with the economic realities.
“Customers are pleading for lower rates, but adjusting prices downward affects our margins,” she explained.
Another forex bureau operator, pointed to currency hoarding in anticipation of further depreciation as a factor slowing business activity. “Many are holding onto their dollars, waiting for rates to climb even higher,” he observed.
Meanwhile, Economic and fixed-income analyst, Wilson Zilevu, has highlighted market sentiment and speculative behavior as key factors driving the surge in exchange rates.
“Speculation among foreign exchange dealers is fueling the current volatility,” Mr Zilevu noted, urging the Bank of Ghana to provide clearer assurances on the availability of foreign exchange to stabilize the market.
Source: Norvanreports