The Ghana cedi has recorded its first marginal depreciation on the interbank market since mid-April, following a sudden spike in demand for the US dollar. This comes just a day after President John Mahama remarked that the cedi’s “true value” lies between GH¢10 and GH¢12 to the dollar—comments some market watchers say may have inadvertently triggered speculative activity.
On Wednesday morning, the dollar was trading between GH¢10.20 and GH¢10.28, compared to the GH¢10.15 to GH¢10.28 range recorded the previous day. On Tuesday, the Bank of Ghana (BoG), which offered $100 million to the market, ended up auctioning $109 million, an unusual outcome considering that, in recent weeks, less than 50% of BoG’s dollar offers had been absorbed, even when the volume was below $50 million.
Analysts say the sudden surge in demand reflects a shift in market sentiment. “The president’s comment may have sent a signal that the cedi has bottomed out, prompting speculators to buy dollars in anticipation of a potential rise to the GH¢12 mark,” one market observer noted.
Until now, the Bank of Ghana had carefully avoided commenting on its preferred exchange rate target, a silence that many believe helped cool speculation and allowed the cedi to appreciate steadily. The president’s statement, though possibly intended to reassure exporters worried about an overly strong cedi making their goods uncompetitive, may have unintentionally opened the door to market jitters.
Market activity on the interbank forex platform remains generally subdued, but the current shift suggests the cedi may face short-term volatility. With Thursday marking the last trading day of the week due to the Eid holiday, attention will be focused on whether the cedi can rebound or whether further depreciation is on the horizon.
