The Ghana cedi has lost marginal value against the US dollar, bringing its year-to-date decline to approximately 26%. This depreciation is attributed to increased corporate demand and recent Eurobond coupon payments.
The Central Bank conducted a 7-day foreign exchange auction, accepting all bids totaling $51.4 million submitted that day. However, this auction was unable to stabilize the local currency, which shed 0.15% against the US dollar week-on-week, closing the week’s trading at a mid-rate of GH¢16.38/$.
In addition to the US dollar decline, the cedi depreciated by 0.24% and 0.70% against the pound and euro, respectively. Currently, the cedi is trading at GH¢16.40 for one US dollar in the forex bureau or retail market.
Last week, the Government of Ghana resumed its Eurobond debt service following a successful restructuring with international bondholders. A total of $520 million was paid to investors, including a $120 million consent fee as part of the restructuring agreement. The government also disbursed approximately $320 million in overdue coupons from 2022 that had been postponed during the debt restructuring process.
Concerns regarding the sustainability of the country’s foreign exchange buffers have resurfaced, particularly as the government aims to fully resume Eurobond debt service in January 2025. Analysts suggest that these concerns may have contributed to the cedi’s depreciation last week and could continue to exert negative pressure in the coming weeks.
