Market sentiments to improve on FX market; one dollar going for GH¢16.48

Market sentiment is expected to improve in the forex market in the coming weeks, offering a more optimistic near-term outlook for the Ghanaian cedi. This positive shift is driven by the anticipated disbursement of a $250 million facility from the World Bank under the Ghana Energy Sector Recovery Programme. The funds are aimed at addressing ongoing energy sector challenges, reducing sector-related debts, and ensuring a stable energy supply to support economic growth.

Many analysts expect the injection of this facility to strengthen Ghana’s foreign reserves, improving liquidity in the foreign exchange market.

Last week, the cedi continued its depreciation against major currencies such as the US dollar and the British pound, although the rate of decline slowed as demand pressures eased. The cedi was quoted at GH¢16.48 to the dollar, reflecting a week-on-week loss of 1.21%, a slight improvement from the previous week’s 1.84% loss. Against the pound, the cedi weakened by 0.71% compared to the prior week’s 1.43% decline.

However, the local currency saw a recovery in its performance against the euro, erasing its 0.42% loss from the previous week in the retail market.

Since the beginning of 2024, the cedi has depreciated by approximately 25.61% against the US dollar.