The Ghanaian cedi’s decline softened in the last two weeks, as both the interbank and retail markets experienced slight decreases.
In the interbank market, the US Dollar to Ghana Cedi exchange rate ended the two-week period at GH¢12.40, down from GH¢12.15, representing a 2.02% decline, compared to a 6.17% drop observed two weeks prior.
In the retail market, the cedi stayed within a narrow range between GH¢13.40 and GH¢13.50 relative to the US dollar, showing a 0.74% drop from 6.72%. Meanwhile, the pound and euro ended at midrates of GH¢18.05 (-2.49%) and GH¢15.70 (-1.59%), compared to GH¢17.60 and GH¢15.70 respectively.
“We observe that the deceleration in the cedi’s depreciation aligns with our previous predictions of stability, backed by increased foreign exchange [FX] inflows and more subdued market emotions. Moving forward, we remain cautiously hopeful about the short-term outlook, as seasonal FX inflows from commodity exports are anticipated to be reflected,” Databank Researchers stated.
It recognized that increased corporate demand, especially from the service industry before the holiday season, could pose an upward risk.
However, it noted that continued foreign exchange support from the Bank of Ghana, backed by a robust reserve buffer and optimistic expectations regarding the International Monetary Fund’s fifth program review, is anticipated to stabilize its outlook.
It also mentioned that the continuing U.S. budget impasse might maintain weakness in the dollar, offering additional support to the USD/GHS currency pair.
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