Ghana cedi slides further on corporate demand

The Ghana cedi extended record losses against the greenback on Monday as corporate demand for the dollar remained high and inflows sluggish, traders said.

The local unit has shed 2.6 percent of its value since the beginning of the year and is currently trading at lifetime lows, said Biggles Amponsah from Access Bank.

We haven't had the flows we were expecting from the mining sector, Amponsah said referring to the sector that brings in the majority of Ghana's foreign inflows.

The dollar-cedi was trading at 1.5280 at midday, after opening at 1.5240, Amponsah said. He expected the cedi to close at 1.53 levels by the end of the day.

There's still demand from all corporate customers and there's no flows yet, said Joyce Bekoe from Barclays Ghana.

Razia Khan at Standard Chartered in London said the Bank of Ghana did not appear to be offsetting the dollar demand and noted other market factors such as the lack of clear timetable for a three-year bond issue open to foreign investors.

What has really taken hold ... are the market specifics. There is a mismatch between demand and supply, she said.

Analysts say due letters of credit from a Christmas scramble for dollars by importers will exert more pressure on the West African currency throughout the first quarter.

Local traders expect the government to issue a three-year bond before the end of January, but the Bank of Ghana has not said when it will happen.