Despite continuous public outcry about the Cedi’s recent performance against its major trading partner currencies, the local currency failed to post any gains at the start of the week as it continued to remain under intense pressure. The Ghanaian Cedi recorded its third consecutive weekly decline against the US Dollar, the British Pound Sterling and the Euro on both the Bank of Ghana (BoG) inter-bank trading platform and on the Open Forex Market (oanda.com). The recent performance has largely been attributable to supply cuts from the central bank following the continuous depletion of Ghana’s Gross International Reserves amid increased forex demand by importers and corporate bodies. This phenomenon has led to an increase in calls by the business community for the introduction of the Chinese Yuan as a major trading currency to reduce the pressure on the three major trading partner currencies. Currently, China is Ghana’s largest trading partner after Europe.
An official of the Bank of Ghana speaking to some media houses has however indicated that the central bank is expected to intervene in the currency market to give some respite to the local currency. Mr. Steven Opata, the head of Financial Markets at the central bank revealed that the central bank is to add at least USD 800 million to shore up the country’s reserves in a bid to stabilize the Cedi. Mr. Opata assured that “it will not be long before we see stability and some recovery in the cedi.” He also noted that the BoG was expecting some inflows from cocoa and oil export proceeds as well as some other financial transactions which will help the central bank to rebuild its reserves to face any systematic shocks that may occur.
On the BoG inter-bank trading platform, the Cedi built on previous weeks’ losses as it recorded its biggest weekly decline this year against the US Dollar, the British Pound Sterling and the Euro. It depreciated by 3.33%, 4.21% and 3.01%, week-on-week, to begin the week at a trading value of GHC 5.2028, GHC 6.8651 and GHC 5.8898 from previous week’s trade values of GHC 5.0352, GHC 6.5876 and GHC 5.7179 against the Dollar, the Pound and the Euro respectively. The greenback gained against a host of currencies including the Cedi after investors and traders bought the Dollar on hopes that China and the US were closing in on securing a trade deal that could end months of tensions between the world’s two biggest economies.
On the Open Forex Market (oanda.com), the Cedi continued its losing streak against its three major trading partner currencies as it extended its recent losses against all three to four weeks in a roll. It depreciated by 2.88%, 3.89% and 2.82%, week-on-week, to trade at 5.5088, GHC 7.2772 and 6.2503 at the start of the week from previous week’s trade figures of GHC 5.3578, GHC 7.0046 and GHC 6.0789 against the Dollar, the Pound and the Euro respectively. The Pound, one of the best performing currencies so far in 2019, rose against the Cedi as uncertainties surrounding Britain’s departure from the European Union continues to diminish. With the risk of no-deal Brexit seen as highly unlikely, investors’ and traders’ appetite for the Pound surged.
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 5.2028 [March 4th, 2019] indicating a 7.74% 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 5.5088 [March 4th, 2019], representing a 12.93% year-to-date depreciation of the Cedi against the US Dollar.