The anticipated US$360 million disbursement from the International Monetary Fund (IMF) in the coming weeks is expected to provide a much-needed cushion to Ghana’s reserves and further augment the supply-side interventions of the Ghana cedi.
This is expected to bolster the performance of the local currency in the near term.
Last week, the Ghana cedi gained further on the back of improved foreign exchange liquidity.
The Bank of Ghana (BoG) sold about US$93.05 million during the daily auctions and auctioned an additional US$20 million to the Bulk Oil Distributing Companies.
This boost in liquidity helped the Cedi to recover 1.85% week-on-week to the dollar.
Similarly, it gained 1.35% against the pound and 1.17% versus the euro.
At the close of the week, the local currency quoted at a mid-rate of GH¢16.25 to one dollar.
The Bank of Ghana reported on Friday, November 29, 2024, that Ghana’s foreign exchange reserves (excluding encumbered assets) increased by 0.77% month-on-month to US$5.2 billion in October 2024 from US$5.2 billion in September 2024.
While this marks an improvement, it is a noticeable slowdown from the 1.95% month-on-month increase recorded in September 2024.
Analysts believed the moderated growth resulted from BoG’s US$376.30 injection into the market in October 2024, which held the cedi afloat.
They however warned that the Bank of Ghana’s ongoing market support presents a downside risk to the country’s foreign exchange reserves, as it may strain the foreign exchange buffer in the near term.
Source: Business Analyst
