GHANA’S cedi is expected to post modest gains against the US dollar in the coming week, bolstered by continued central bank support and improved market liquidity, according to traders and analysts cited by Reuters.
Data from LSEG showed the cedi trading at 15.4300 to the dollar on Thursday, a slight improvement from 15.4500 at last Thursday’s close, as confidence returned to the interbank market.
The currency’s uptick follows a period of uncertainty tied to global trade developments, particularly concerns over new US tariffs, which have affected sentiment across several emerging markets.
Improved liquidity driving confidence
Sedem Dornoo, senior trader at Absa Bank Ghana, told Reuters that the cedi’s performance this week was largely driven by firm central bank intervention and a narrowing of bid-offer spreads, signalling increased interbank activity.
‘The cedi has rallied this week on the back of increased support from the central bank,’ Dornoo said. ‘Interbank liquidity has improved, with bid-offer spreads tightening significantly as more market makers have actively shown firm prices.’
Analysts say the recent injection of foreign exchange by the Bank of Ghana has helped stabilise the market, making it easier for traders to quote tighter spreads and reducing short-term volatility.
Outlook remains cautiously optimistic
Looking ahead, traders expect the cedi to remain supported if current levels of liquidity are sustained.
‘We expect continued liquidity, with room for the local unit to post further gains as FX supply remains strong,’ Dornoo added.
However, market sentiment may still be influenced by broader geopolitical developments, including ongoing trade tensions and shifts in global monetary policy, which could affect investor appetite for African currencies.
Despite these headwinds, Ghana’s central bank has been proactive in deploying monetary tools to protect the cedi from sharp depreciation, a trend that is expected to continue as inflation moderates and fiscal reforms remain on track.
A steady week for Ghana’s currency
The cedi’s marginal recovery this week comes as the Bank of Ghana maintains its support for the local currency amid growing pressure on emerging market exchange rates. The outlook, according to Reuters, suggests room for cautious optimism, provided external shocks remain manageable and foreign currency inflows remain consistent.
Traders and market participants will be closely monitoring any signals from the US Federal Reserve, as well as updates on global trade policy, which could influence risk appetite and FX flows into frontier markets like Ghana.
