Ghana’s cedi weakened to the lowest in seven months as importers bought dollars to bring in consumer goods to sell in West Africa’s second-biggest economy.
The currency of the world’s No. 2 cocoa producer depreciated 0.4 percent to 1.9415 per dollar by 1:33 p.m. in the capital, Accra, according to data compiled by Bloomberg. A close at this level would be the lowest since Aug. 22.
“Demand is coming from the commerce industry,” Chris Nettey, a currency trader at Stanbic Bank Ghana Ltd., said by phone today. “Trade business has actually gone up; from the beginning of this month, you can observe that dollar buying from traders has been rising.”
The cedi has lost 1.9 percent against the U.S. currency this year as it faces pressure from the country’s widening current-account deficit, the broadest measure of trade in goods and services, that rose 40 percent to $4.9 billion last year, according to the central bank. The Bank of Ghana manages the demand by selling dollars to banks at irregular intervals.
It sold $8 million today to lenders for non-oil imports and $13 million for oil, Adams Nyinaku, the institution’s head of treasury, said by phone today. In the year so far, it’s given $282.5 million for non-oil products and $498 million for oil, he said.
The rising demand for imports “may be a sign that the challenges the country is having in terms of energy supply and disruption in water supply are beginning to have a heavy toll on industry,” Sampson Akligoh, head of research at Accra-based Databank Financial Services Ltd. in Accra, said by phone today. Manufacturing may be slowing as industrial companies struggle to meet rising input costs, he said.
“In order to keep their margins, companies turn to imports while traders take advantage of the shortfall created in manufacturing production to import,” Akligoh said.
Ghana is cutting water and electricity to companies and residential consumers across the country, a situation that President John Dramani Mahama described as a “national crisis” on March 6.