The Ghana cedi is expected to post a mixed-performance this week as a widening inflation differential may pose depreciatory pressures.
This is because investors are seeking investments in dollar denominated or fixed assets.
The Ghana cedi remained stable against the US dollar last week on the retail market with a mid-rate of ¢11.43 at the close of trading last Friday, August 11, 2023. This kept its year-to-date at about -11.0% to the American greenback.
The local currency, however, lost marginally (week-on-week) against the dollar on the interbank market, bringing its year-to-date loss to about 21.00%. The unit also slid slightly against the the GBP (-0.05% w/w) on the interbank market but gained (0.21% w/w) vs the euro.
This was largely due to the marginal increase in inflation which is compelling investors to think twice about investments in cedi denominated assets.
Additionally, the US inflation cooled at 3.2% year-on-year from 3.00% in June 2023, below the consensus estimate of 3.3%.
This caused the US dollar index to inch up 0.68% week-on-week.