The cedi remained under pressure yesterday, closing at a fresh low amid strong dollar demand.
Ongoing US dollar demand amid limited supply has been one of the factors putting pressure on the cedi. The Bank of Ghana has been unable to meaningfully support the cedi as foreign exchange reserves decline. Moreover, heightened fiscal and debt sustainability concerns have triggered a rotation out of Ghanaian bonds and added further downside pressure to the currency.
With no new developments in negotiations between Ghana and the International Monetary Fund from the IMF annual meetings that ended last Sunday, Ghana’s fiscal outlook remains worrying. As mentioned in previous commentary, securing an IMF programme as soon as possible remains key to addressing Ghana’s deteriorating macroeconomic outlook and supporting the cedi.