Record losses for the Ghanaian cedi against the US dollar have been reported this month, as corporate demand for the US currency remains high while inflows are slower than usual.

A slew of letters of credit (L/Cs) due for payment are likely to exert even more pressure on the cedi.

Negative factors

By 24 January, the cedi had already slid 2.6 per cent against the US dollar since the beginning of this year.

Analysts say this is largely due to more sluggish than expected inflows from Ghana's substantial mining sector.

In the meantime, corporate demand for the US dollar remains strong, they say.

Additional pressure

Other factors contributing to the weak cedi include the Bank of Ghana apparently not offsetting US dollar demand and a lack of a clear timetable for a three-year bond issue open to foreign investors according to analysts.

They also say that L/Cs opened by importers for holiday season imports will exert even more pressure on the cedi in the first quarter of this year.

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