Cedi gains for second week as GoldBod boosts dollar supply

The Ghana cedi has recorded marginal gains against the US dollar on the interbank market for the second consecutive week, supported by improved foreign exchange liquidity following fresh dollar sales by the Ghana Gold Board (GoldBod).

Market watchers estimate the currency’s appreciation at just under one per cent, offering some relief after weeks of sustained pressure since the third quarter.

The recent depreciation has largely been attributed to increased demand for dollars by businesses financing imports ahead of the December festive season, alongside energy-related payments by the Bank of Ghana (BoG) for crude oil and finished petroleum products.

The latest recovery follows near-weekly losses since last month, raising hopes that increased foreign exchange supply could help stabilise the local currency.

GoldBod sales boost dollar supply

Market participants have attributed the cedi’s improved performance largely to increased foreign exchange support, particularly dollar sales by GoldBod.

On Tuesday, the Board sold US$197 million to commercial banks at a rate of GH¢11.70 to the dollar.

According to information available to Joy Business, all participating banks received the full amounts they requested, easing immediate demand pressures and improving liquidity in the interbank market.

The outcome has raised expectations that the cedi could record further gains if the supply of foreign exchange is sustained.

The transactions were conducted through GoldBod’s GoFX platform as part of efforts to channel foreign exchange receipts from gold exports into the formal banking system.

The sales also form part of GoldBod’s plan to supply US$1 billion to commercial banks under revised arrangements for foreign exchange generated from artisanal and small-scale gold exports.

The initiative is expected to complement interventions by the Bank of Ghana aimed at improving dollar availability and reducing pressure on the domestic currency.

Stability hinges on sustained support

Some commercial banks have expressed cautious optimism that the cedi could remain relatively stable if improved foreign exchange liquidity continues.

However, sustained gains will depend on whether dollar inflows can adequately meet demand from importers and other businesses, particularly as seasonal purchasing activity intensifies towards the end of the year.

Energy-related foreign exchange requirements could also continue to influence market conditions.

While the latest GoldBod sales have provided some relief, market participants will be watching subsequent dollar supply and demand trends to determine whether the recovery can be maintained.

For now, the cedi’s second consecutive week of gains signals a possible easing of recent pressure, although the durability of the improvement will depend on continued foreign exchange support and developments in the broader market.