The Ghana cedi experienced a slight depreciation against the US dollar, pushing its year-to-date loss to around 26%. This was driven by increased corporate demand for foreign exchange and recent Eurobond coupon payments.
The Bank of Ghana conducted a 7-day foreign exchange (FX) auction, accepting all $51.4 million in bids. However, the auction did not stabilize the cedi, as it declined by 0.15% week-on-week against the US dollar, ending the week at a mid-rate of GH¢16.38 per dollar. It also weakened by 0.24% against the British pound and 0.70% against the euro.
Currently, the cedi trades at GH¢16.40 per dollar in forex bureaus and the retail market.
Last week, the Government of Ghana resumed Eurobond debt service payments after successfully restructuring its debt with international bondholders. As part of the agreement, $520 million was paid to investors, including a $120 million consent fee. Additionally, $320 million in delayed coupon payments, originally due in 2022, was disbursed.
Concerns have resurfaced over the sustainability of Ghana’s foreign exchange reserves, especially as the government plans to fully resume Eurobond debt servicing in January 2025. Analysts suggest that these concerns may have contributed to the cedi’s depreciation and could continue to affect it in the coming weeks.
