Pressure on the cedi is waning as demand for forex eases signalling strong performance of the local currency weeks after it took a nosedive.
This positive trajectory aligns with analysts’ projections that the depreciation of the cedi would be reversed by the first half of the year due to interventions in the forex market by the Bank of Ghana.
The cedi is making some gains against major trading partners. For instance, the Cedi gained 1% against the American dollar last week.
It also gained 2% of its value against the British pound while recovering 3% of its loss against the Euro.
Recently, the Bank of Ghana supported the spot market with $11 million, along with a $20 million forex auction to BDCs, all in a bid to correct market imbalances.
As the country is in the final stages of signing an MoU with bilateral creditors, this move is expected to significantly trigger Ghana’s third tranche approval from the IMF for the release of the next $360 million disbursement by the end of June.
This should boost international inflows and unlock funds from other multilateral partners, such as the World Bank, to help bolster forex liquidity and further stabilize the local currency.