GCB Capital Research reports that the Ghanaian Cedi underwent a marginal depreciation against the US Dollar (USD) and the British Pound (GBP) on the retail market last week.
The marginal depreciation culminated in a 0.6% and 0.7% weakening to close at GHS 11.5/US$1 (Year-to-Date change of +3.9%) and GHS 15.64/GB£1 (Year-to-Date change of -2%) respectively.
The USD continued its upward trajectory over the course of five weeks, as market participants closely monitor the forthcoming Federal Reserve’s Jackson Hole symposium for insights into future interest rate trajectories.
Amidst inflationary pressures, the prevailing sentiment is that interest rates will persist at elevated levels for a more extended period, further fueling the USD’s ongoing 5-week rally and exerting pressure on several frontier market currencies.
Nonetheless, domestic foreign exchange markets are anticipated to experience relative stability. This is reflected in the Bank of Ghana’s (BoG) 30-day forward guidance provided in the recent forward FX auction for Bulk Oil Distribution Companies (BDCs).
This guidance settled at GHS 11.346/US$1, pointing towards a foreseeable period of stability in the domestic FX arena.