The current depreciation of the Ghana cedi towards the key foreign currency is predicted to proceed as a result of subdued overseas alternate liquidity.
Final week, the native forex depreciated throughout the key buying and selling currencies as overseas alternate liquidity remained subdued.
Moreover, Ghana Cocoa Boards’s intention to desert its annual cocoa syndication mortgage revived market uncertainties surrounding the cedi’s near-term stability.
Analyst additionally imagine the current coupon funds on Eurobonds by the federal government could have influenced Ghana cedi-funded overseas alternate demand final week, contributing to the cedi’s depreciation.
Final week, the native unit misplaced 0.31% towards the greenback, 1.82% vs the pound and three.76% to the euro on the retail market. It bought at GH¢16.28 to a greenback on August 26, 2024, taking its year-to-date loss to 24.57%.
In the meantime, Ghana is predicted start a 10-day Eurobond debt alternate this week in a bid to conclude the $13 billion Eurobond debt rework.
In keeping with Bloomberg, the alternate will see traders swap their present bonds for 2 new non-compulsory bonds, that’s the DISCO and PAR.
The DISCO choice will provide traders as much as 37% haircut with two new bonds maturing in July 2029 and 2035 at an rate of interest of 5%. The PAR choice then again may even provide traders rates of interest of 1.5% on new bonds maturing in Jan 2037 with none haircut.
Analysts anticipate market uncertainties to enhance after a profitable alternate, which may scale back the pressure on the cedi.