Ghana’s cedi at record low amid surging FX demand from importers
The Central Bank of Ghana is failing to stem the worrying slide of the national currency the cedi despite making the biggest injection yet of dollars, Bloomberg reports.
Reports say the biggest single injection of dollars yet by the central bank failed to stem the cedi’s slide on Wednesday amid a surge in foreign-currency demand from importers.
The Ghanian currency dropped 1.6% to 6.03 a dollar by 11:52 a.m. in Accra, poised for the weakest close on record. The cedi has often been cited as a better performing currency in a region where currency volatility is the norm.
That erased the 1.4% gain on Tuesday after the Bank of Ghana tripled the amount of dollars offered at its forward-rate auction to $75 million, the most since the sales began in 2019.
“Business activity in general is bouncing back, and that’s what is driving the demand” for dollars, Gabriel Engmann, a currency trader at GCB Bank Ltd. in Accra, said by phone.
“A lot of companies that were down are picking up. We are getting demand from the commerce and manufacturing sector.”
The currency of the world’s second-biggest cocoa producer has weakened every month since May as an economic revival following the pandemic spurred companies to soak up dollars to purchase goods to expand.
The West African nation’s economy is poised to expand 5% this year and the next, according to government forecasts. That would be the fastest pace since 2019.
The country’s trade surplus narrowed to 1.2% of gross domestic product in the first half from 1.5% a year earlier as imports increased.