Ghana’s cedi strengthened against the dollar for the first time this month as banks sold the U.S. currency to meet a central bank requirement to hold a portion of their reserves in the local notes.
The currency of West Africa’s second-biggest economy gained 0.1 percent to 1.9425 per dollar by 2:39 p.m. in Accra, the capital, the most in almost two weeks, according to data compiled by Bloomberg.
Lenders swapped dollars for cedis to meet the Bank of Ghana’s requirement that they hold 9 percent of their deposits in the local currency at the central bank, Sadiq Abubakar, a currency trader at International Commercial Bank Ltd. in Accra, said by phone today.
“The Bank of Ghana has been tightening liquidity and this has made it difficult for banks to borrow from among themselves to meet the central bank’s reserve requirement,” he said. “Banks are therefore converting some of their dollar positions to cedis to meet the requirement.
Ghana’s benchmark 91-day Treasury bill yields rose six basis points to 22.98 percent on April 5, a fourth week of increases and the highest since Feb. 22, as the central bank offered better rates to remove excess cedis from the local market. After strengthening less than 0.1 percent in January, the cedi depreciated 1.8 percent over the next two months.
Adams Nyinaku, head of treasury at the Bank of Ghana, was not available to immediately comment, said a woman who answered a call made to his office today and didn’t give her name.
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