Ghana cedi to dollar rate to remain stable in September: See latest projected rates

• The cedi is projected to trade between GH¢10.95 and GH¢11.76 to US$1 in September.

• Bank of Ghana interventions and foreign exchange support are expected to help stabilise the currency.

• Higher demand for dollars ahead of the festive season could put renewed pressure on the cedi.

The outlook comes after a mixed performance by the local currency in August, when it maintained much of its earlier gains despite coming under renewed pressure towards the end of the month.

The cedi strengthened to around GH¢10.95 to the dollar during the second week of August. However, it ended the month at about GH¢11.25 to the dollar on the interbank market. It also closed at GH¢15.23 against the pound sterling and GH¢13.04 against the euro.

Also Read: Ghana cedi to dollar rate: Latest BoG rates for September 1

Over the two-week period under review, the cedi lost 2.67% of its value against the dollar, 2.55% against the pound and 2.72% against the euro.

Despite the late-August decline, the cedi's cumulative depreciation for the year stood at 6.89% at the end of August, an improvement from the 10.04% recorded at the end of July.

The relative calm in the foreign exchange market has been partly attributed to foreign exchange sales by the Bank of Ghana (BoG).

Also Read: 10 things you should never do with Ghana cedi notes and coins, according to the Bank of Ghana

The central bank is estimated to have supplied about $912 million to the market in August, representing 91.2% of its planned $1 billion intervention.

The increased supply of foreign exchange helped reduce pressure on the cedi and limited further losses during the month.

On the retail market, the local currency performed better against some major currencies. It gained 4.33% against the dollar and 0.47% against the pound, ending August at GH¢11.55 and GH¢15.88 respectively.

Also Read: Dollar, Pound, Euro: Latest Bank of Ghana exchange rates for today

The cedi, however, recorded a marginal 0.18% decline against the euro, closing at GH¢13.68.

Analysts at Databank expect the BoG to maintain strong support for the foreign exchange market in September as demand for dollars typically increases ahead of the festive season.

The central bank could raise its foreign exchange intervention beyond $1 billion, particularly if seasonal demand from importers puts additional pressure on the cedi.

Continued intervention could help the local currency remain towards the stronger end of the projected GH¢10.95 to GH¢11.76 range.

Also Read: Ghana cedi weakens against dollar, pound and euro: See BoG's official exchange rates for July 2

However, increased demand for foreign currency could still trigger periods of depreciation during the month.

The overall forecast therefore points to a relatively stable cedi in September, with the scale of BoG intervention and changes in foreign exchange demand expected to be the main factors shaping its performance.