The Ghana cedi is expected to exhibit mixed performance against the US dollar for the second week running.
This is because of the uncertainty characterising the expected International Monetary Fund support programme for Ghana which has kept some market players anxiously waiting for updates.
They believe a clear statement regarding the country’s programme from the Fund will calm nerves.
The cedi fell in value across the major trading currencies last week due to renewed demand for the dollar and the other major foreign currencies.
The local currency lost 4.37% week-on-week against the US dollar to close trading at a mid-rate of about ¢11.95 to the dollar. It was, however, relatively stable against the pound and euro, losing only 1.07% and 0.82% respectively.
The Bank of Ghana injected about $3 million on the spot market and allocated $20 million to the Bulk Oil Distributions Companies, which some analysts said was insufficient to meet market demand.
Meanwhile, the increase in the cash reserve ratio of banks to 14%, from 12% will compel banks to sell foreign exchange holdings to unlock cedi liquidity.
Again, the World Bank has contributed $250 million to Ghana’s Stability Fund to support banks affected by the Domestic Debt Exchange Programme. This will improve dollar liquidity in circulation.