The Ghana cedi is expected to trade between GH¢10.95 and GH¢11.76 to the US dollar by the end of September with the Bank of Ghana likely to increase its foreign exchange support as seasonal import demand builds ahead of the festive season.

The forecast follows a mixed performance by the local currency in August, when it traded largely within expectations and remained anchored around the GH¢11.00 level against the dollar despite a modest correction from its strong mid-month performance.

The Ghana cedi ended August on a slightly weaker note after recording strong appreciation in the second week of the month, when the dollar traded at around GH¢10.95.

By the last trading day of August, however, the cedi’s year-to-date loss had narrowed to an average of 6.89 percent, compared with 10.04 percent at the end of July.

Over the two-week review period, the cedi depreciated by 2.67 percent against the US dollar, 2.55 percent against the pound sterling and 2.72 percent against the euro on the interbank market.

It closed at GH¢11.25 to the dollar, GH¢15.23 to the pound and GH¢13.04 to the euro.

On the retail market, however, the currency recorded gains against the dollar and the pound. The cedi appreciated by 4.33 percent against the dollar and 0.47 percent against the pound, closing at GH¢11.55 and GH¢15.88 respectively.

Against the euro, it weakened marginally by 0.18 percent to close at GH¢13.68.

Analysts attributed the relative stability in the foreign exchange market during August partly to the Bank of Ghana’s intervention.

The central bank is estimated to have sold about US$912 million during the month, representing 91.2 percent of its planned US$1 billion foreign exchange intermediation.

The intervention helped ease pressures in the foreign exchange market, curb speculative positioning and narrow the cedi’s year-to-date depreciation.

Looking ahead, analysts at Databank expect the Bank of Ghana to modestly increase its foreign exchange support beyond US$1 billion as demand for imports rises in the lead-up to the festive season.

This will be critical in determining whether the cedi stays closer to the lower end of the projected GH¢10.95 to GH¢11.76 trading range.