The cedi remains under strain this week, as persistent demand for the US dollar continues to exert downward pressure on its performance. Last week saw a slight depreciation in the local currency, bringing its year-to-date losses to approximately 3%.
The sustained elevated demand for the dollar hindered the cedi’s progress across major trading currencies throughout the week, with the Central Bank’s injection of $3 million failing to significantly buoy the local currency. As a result, the cedi weakened by 0.60% against the American greenback, closing at GH¢12.57 in the retail market by week’s end.
While the cedi experienced marginal fluctuations against other key currencies such as the pound and euro, the overall trend suggests a challenging environment for the local currency.
Global creditors and rating agencies convened in discussions last week, focusing on the impact of rating actions on debt-distressed nations like Ghana. It was emphasized that despite successful debt restructuring efforts, rating agencies’ actions have further increased borrowing costs for these countries.
Analysts posit that a positive reassessment of the rating methodologies for such debt-distressed nations could potentially bolster investor confidence in Ghana. However, despite the anticipation of such developments, the cedi is expected to remain under pressure in the near term.