Despite recent assurances by the minister of finance, Ken Ofori-Atta, that the free fall of the local currency against its major trading partner currencies would be halted, the Cedi showed little signs of traction to post some gains. The Ghanaian Cedi began the week building on previous weeks’ losses against the US Dollar on the Bank of Ghana (BoG) inter-bank trading platform. Against the British Pound Sterling and the Euro, the Cedi erased last week’s marginal gains recorded against the pair on the BoG inter-bank trading platform. On the Open Forex Market (oanda.com), however, the Cedi posted a mixed performance against the three major trading partner currencies.
The Cedi is expected to rebound in the coming weeks following a number of measures being implemented by the government to shore up the supply of forex to commercial banks. According to Mr. Ken Ofori-Atta, the country’s forex reserves is to be boosted with USD 900.00 million from COCOBOD proceeds which will allow the central bank to auction foreign currency in the market to meet the sharp rise in demand for forex. In the interim, however, the government has successfully obtained a parliamentary backing to contract a bridge loan agreement in excess of USD 500.00 million from Standard Chartered Bank to ensure a smooth transition. Already, some speculators have begun offloading their positions on the back of an expected increase in forex supply which should see the Cedi record some gains in the coming weeks.
On the BoG inter-bank trading platform, the Cedi fell across the board to begin the week with depreciation of 0.09%, 0.97%, and 0.91%, week-on-week, against the Dollar, the Pound and the Euro respectively. The Cedi traded at GHC 5.2426, GHC 6.9213, and GHC 5.9410 at the start of the week from previous week’s trade value of GHC 5.2378, GHC 6.8547, and GHC 5.8874. The Pound came in strong to recover from last week’s 0.15% week-on-week loss after British lawmakers voted against a disorderly exist from the European Union. This move restored investors’ confidence in the Pound as they bought the Pound. The Pound, during the week, was also supported by data which showed that British employers increased their hiring of labour at the fastest pace in more than two years.
On the Open Forex Market (oanda.com), the Cedi posted a mixed performance where it recovered from previous week’s 0.51% loss against the Dollar and erased part of last week’s gains against the Pound. It appreciated by 0.99% and 0.13% to begin the week at GHC 5.4824 and GHC 6.2166 from previous week’s trade values of GHC 5.5370 and GHC 6.2244 against the Dollar and the Euro respectively. The Dollar fell against a host of currencies including the Cedi after US economic data disappointed bolstering the US Fed’s stance of pausing its rate hikes. US payroll data showed that employers only added 20,000 jobs in February representing 94% decline from the January figures. Against the Pound, the Cedi erased part of last week’s gains to begin the week with a week-on-week depreciation of 0.55%. It traded at GHC 7.2702 at the start of the week from previous week’s trade value of GHC 7.2303.
According to the Bank of Ghana inter-bank rates, the Ghanaian Cedi began 2019 at GHC 4.8291 [January 2nd, 2019] against the US Dollar and is currently selling at GHC 5.2426 [March 18th, 2019] indicating an 8.56% year-to-date depreciation. Similarly, on the Open Forex Market (oanda.com), the Ghanaian Cedi traded at GHC 4.8780 [January 2nd, 2019] and is currently trading at GHC 5.4824 [March 18th, 2019], representing a 12.39% year-to-date depreciation of the Cedi against the US Dollar.