After a brief resilient performance, the Ghanaian Cedi remained under pressure this week to post marginal losses against its three major trading partner currencies on both the Bank of Ghana (BoG) inter-bank trading platform and on the Open Forex Market (oanda.com). The Cedi after losing over 8.50% of its value against the US Dollar in the period from the start of the year to mid-March, came back strongly to recover some of its losses to end the first quarter with a depreciation of 5.32% on the BoG inter-bank trading platform. The Cedi, however, lost traction to continue to post recoveries against its three major trading partner currencies as it fell to a 7-day low against the Dollar this week. The Cedi’s performance at the start of the week comes after an uptick in the inflation rate. Inflation figure for March was reported at 9.3%, up from 9.2% in February after an upward review of petroleum products fed into high prices of food and non-food items.
The Cedi is expected to maintain stable performance in the remaining part of the year on the back of a positive projection by the International Monetary Fund (IMF). The IMF in its latest World Economic Outlook report projected Ghana to be the world’s fastest-growing economy in 2019 with a growth forecast of 8.8%. According to the IMF, Ghana would record an impressive economic growth despite the slow growth of the world economy. The IMF indicated that the world economy is set to grow at 3.3% this year, the weakest in ten years. This was after the lender revised downwards its early forecasted growth rate of 3.5%. Ghana’s projected growth rate of 8.8% is set to restore investor confidence in the economy.
On the BoG inter-bank trading platform, the Cedi depreciated by 0.02%, 0.46%, and 0.43%, week-on-week, to begin the week at GHC 5.0885, GHC 6.6695 and GHC 5.7530 from previous week’s trading values of GHC 5.0875, GHC 6.6387, and GHC 5.7284 against the Dollar, the Pound, and the Euro respectively. The Cedi lost against the Dollar after strong US inflation and labour data which could erase fears of a sharp slowdown of economic growth in the US. US producer price index inched up by 0.6% in March, the largest growth in five months while the government’s broadest inflation gauge strengthened by 0.4% in March, the highest monthly rise in more than one year.
On the Open Forex Market, the Cedi lost by 0.07%, 0.39% and 0.62%, week-on-week, to trade at GHC 5.1782, GHC 6.7834 and GHC 5.8558 at the start of the week from previous week’s trade values of GHC 5.1748, GHC 6.7569 and GHC 5.8197 against the Dollar, the Pound and the Euro respectively. The Pound recovered part of previous week’s loss against the Cedi after Pound volatilities collapsed following a delay to Britain’s divorce from the European Union (EU). EU leaders and the UK government agreed to extend the departure date for the UK to leave the bloc by six months to October end. This move lowered the chances of Britain crashing out of the bloc without a trade deal.
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 5.0885 [April 15th, 2019] indicating a 5.37% 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 5.1782 [April 15th, 2019], representing a 6.15% year-to-date depreciation of the Cedi against the US Dollar.