- July 28, 2022
- Posted by: Charles Yeboah Nixon
- Categories: Banking and Finance, Economics, Finance, Forex
Total bids outstripped sale of US dollar auctioning by $82 million on 26th July 2022, the Bank of Ghana (BoG) has revealed.
According to the Central Bank, total bids submitted by dealers or the banks were $107 million, as against $25 million of the amount accepted.
This indicates why the cedi has come under severe pressure in recent days, losing ground against the American ‘greenback’. The demand for the American currency has been very high.
$51.25 million of the 7-day tenor was the highest bid made by the dealers, followed by $28.75 million for the 15-day tenor.
The 30-day tenor received bids worth $19.75 million, whilst the 45-day tenor received bids of $4 million.
The rates for the 7-day tenor were priced within the range of 8.09 and 8.20. That of the 15-day were within the range of 8.14 and 8.25.
Overall, 150 bids were submitted by the dealers, but 34 of the bids were accepted.
Cedi loses 19.2% value to dollar in almost 7 months of 2022 – BoG
The cedi lost 19.2% in value to the US dollar in almost seven months of 2022.
According to the Summary of Economic and Financial Data by the Bank of Ghana, the local currency went for ¢7.43 to the American ‘greenback’ on the interbank market as of July 22nd, 2022.
It is however selling at about ¢8.30 pesewas to the US dollar on the retail market.
Some currency analysts have attributed the lack of dollar inflows, particularly Eurobonds as the main reason behind the volatility of the cedi.
Others also believe the huge interest payments on borrowed funds (external) by government is a major reason.