The local currency has depreciated by about 18.89 per cent to the dollar on the interbank market and 26 per cent on the retail market.

Speaking to Joy Business, Senior Economic and Currency Analyst, Courage Martey explained that market participants are not confident of the market outlook.

He is therefore calling for new ways to cushion the country’s foreign reserves.

“The cedi’s problem is idiosyncratic because of the fixation of regular Eurobond inflow’s which is now missing today. And the kind of the withdrawal symptom from the Eurobond market is really squeezing the cedi hard and the market is really not comfortable with the level of reserves [Ghana’s foreign reserves] they are seeing.”

Furthermore, he said “in recent weeks or so, you’d also agree that there has been negative noise around the level of reserves that we have. And that also plays into the psychology of the market in a negative way and the cedi is really under serious selling pressure”

Mr Martey continued, saying, despite the approval of the $750 million syndicated loan by Parliament yesterday, the outlook of the foreign exchange market is not encouraging.

“The good news is that yesterday parliament approved some $750 million, out of the $1.0 billion. However, the understanding is that it doesn’t fully resolve our total external financing means for the year [2022] and so the market doesn’t have that full confidence that the supply side or the gap between demand and supply is fully met with this approval”.

So that limited supply without options to beef up the reserve right now is really playing negatively on the minds of investors who are really taking cover in safe haven currencies like the US dollar and selling the Cedis for the dollar.