The Ghana cedi weakened on the interbank market last week, with analysts cautioning that near-term pressures against the US dollar are set to intensify.

According to Databank Research, easing global tensions and a stabilising CBOE Volatility Index (VIX) could shift investor flows away from gold and into US dollar assets, potentially heightening pressure on the local currency.

Gold is one of Ghana’s top foreign exchange earners.

On the interbank market, the cedi depreciated by 1.41% against the dollar, 2.82% against the euro, and 3.73% against the pound, closing at GHS10.65/USD, GHS12.47/EUR and GHS14.45/GBP over the two-week trading period.

In the retail market, the local unit showed mixed performance. The USD/GHS pair traded between 11.50 and 11.90, with the cedi recording a modest 1.06% gain.

It also appreciated by 0.64% against the pound to close at GHS15.65/GBP, but slipped 0.73% against the euro to GHS13.70/EUR.

Databank noted that the cedi showed “modest stability” on the interbank market, firming slightly from GHS10.80/USD to GHS10.65/USD despite renewed corporate demand pressures and thin foreign exchange support.

However, in the retail market, sustained demand pressures continued to weigh on gains, keeping the currency largely range-bound.

Analysts say the outlook for the cedi remains cautious, with potential weakening ahead if capital flows increasingly favour the US dollar over commodities such as gold.