The first installment of the $800 million Cocoa Syndicated Loan is alleviating pressure on the Ghana cedi a few days before the end of 2024.
After holding constant in November 2023, the local currency has been under some pressure this month.
However, market participants anticipate that foreign exchange inflows would strengthen supply-side intervention and support the cedi in the near term.
Furthermore, they anticipate that the final Bulk Oil Distribution Companies Foreign Exchange auction of the year would boost cedi’s outlook this week. The Central Bank sold $20 million to the BDCs at a price of $12.14.
In the retail market so far this week, the cedi has gained some strength versus the dollar. It is trading at 12.18 to one US dollar, down from 12.23 last week.
The Bank of Ghana, on the other hand, rates one dollar to 11.65 cedis.
Despite better FX availability, the local currency lost minor territory versus the main trade currencies last week. In anticipation of a $541 million inflow from the Cocoa Syndication loan, the Bank of Ghana sold roughly $8 million on the spot market.
However, this was insufficient to keep the cedi stable, resulting in a 0.41% week-on-week depreciation, with the cedi ending at 12.23/$ at the week’s end.
On the retail market, it fell 0.33% and 7.55% against the pound and euro, respectively.