Cedi depreciation eases
The cedi posted a mixed fortune in the week ending September, trading largely stable against the three major international currencies.
Against the US dollar, it was stable for the most part before easing in the later sessions as demand pressures mounted.
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GCB Capital attributed the easing to the Finance Minister, Ken Ofori-Atta's, presser at midweek, which sought to calm investors and appraised the market of the progress of negotiations with the International Monetary Fund (IMF), proved supportive.
It said in its weekly insight that with the rising demand amid the limited supplies, the cedi, however, changed course to close the week lower against the three major trading currencies.
US dollar
The US dollar is on the bounce, appreciating against global and emerging market economy currencies as the Fed's hawkish stance has lifted the 182-day treasury-bill yield above the 10-year UST benchmark.
The combination of a firmer US dollar and elevated demand depressed the cedi, with our reference interbank cedi retail rate closing the week at 1.4 per cent weaker verse the US dollar (negative 40 per cent year-to-date (YTD), while the BoG's reference rate closed 0.66 per cent weaker (-37.47% YTD).
Pounds sterling
The Great British pounds sterling eased to a record low at last week's opening following the inflation-enforcing tax measures in Britain.
However, the pound trimmed its losses after the Bank of England (BoE) pledged to purchase unlimited quantities of longer-dated bonds but closed the week with a net depreciation.
Regardless, the local unit ceded 2.68 per cent and 1.23 per cent of its value to the pound on the interbank and retail markets, respectively.
Euro
The Euro traded lower verse the US dollar following a surge in inflation in the Eurozone to 10 per cent, reinforcing concerns about a near-term recession.
The European Central Bank (ECB) could respond with another significant rate hike in October 2022, which poses a further downside risk to growth.
The cedi closed weaker, ceding 1.51 per cent verse the euro on the interbank market last week.
The onset of seasonal foreign exchange (FX) demand pressures and the bearish market sentiments could further weaken the US dollar-cedi pair in the fourth quarter of 2022, pending a breakthrough in negotiations with the IMF.
However, the anticipated cocoa syndication loan of about US$1.3bn, despite the delayed closure of the deal, could provide a temporary respite in the last quarter of 2022.