The Ghana cedi strengthened in value by almost 3% to one US dollar this week.
This is coming after it had depreciated by about 1.98% to the American greenback last week.
The local currency is going for ¢12.60 to one American greenback in the retail or forex market.
It also gained some value against the pound and euro, selling at ¢14.90 and ¢13.10 respectively.
However, the year-to-date loss to the dollar is about 18%. This means the cedi remained relatively stable in February 2022 after depreciating by about 19% in January 2023 alone, according to the Bank of Ghana.
Checks by Joy Business at some forex bureaus indicate that the cedi’s renaissance begun mid-week (March 1, 2023) with some analysts attributing it to improve dollar supply.
Again, the suspension of external debt service appears to have eased the pressure on foreign exchange supply, as the country is no longer servicing most of its external debt. For instance, the January 18, 2023 Eurobond coupon ($41 million) was not paid.
“This external debt service suspension is easing the pressure and making the FX available for other purposes although still on a knife’s edge supply”, a currency analyst told Joy Business via email.
Also, yields on T-bills have remained elevated in the past few months, reducing investor appetite for the dollar.
Additionally, there’s still a ban on the sale of FX to importers of certain goods the government described as “non essential items”.
The Ghana cedi has seen a better performance since depreciating sharply in January 2023.
On the interbank market, the Bank of Ghana quoted one dollar to ¢11.01.