The Ghanaian Cedi at the start of the week posted a mixed performance against its three major trading partner currencies on the Bank of Ghana (BoG) inter-bank trading platform. The Cedi recovered part of its losses recorded last week against the US Dollar and further built on previous weeks’ gains against the British Pound Sterling. Against the Euro, on the BoG inter-bank trading platform, the Cedi erased part of its previous week’s gains. The Cedi’s performance at the start of the week comes after the Vice President, Dr. Mahamudu Bawumia, announced a 50% reduction in the benchmark value on all imports and 30% on vehicles in a town hall meeting held by the Economic Management Team. The directive according to some industry analysts may further worsen Ghana’s balance of payments as they fear that imports may further rise above the country exports. On the Open Forex Market (oanda.com), the Cedi gained traction to recover from previous week’s dip against its three major trading partner currencies.
According to data revealed by the central bank, the Cedi’s outlook remains stable on the back of a significant increase in Ghana’s Gross International Reserves (GIR). The Governor of the BoG noted at the monetary policy rate announcement last week that “the GIR position has improved and should provide cushion to the Cedi, which is already making some considerable gains against all the major currencies.” The GIR stood at USD 9.9 billion (5.0 months of import cover) as at the close of the first quarter of 2019, up from USD 7.0 million (3.6 months of import cover) as at the close of 2018.
On the BoG inter-bank trading platform, the Cedi gained 0.02% and 0.51%, week-on-week, to begin the week at GHC 5.0875 and GHC 6.6387 from previous week’s trading values of GHC 5.0884 and GHC 6.6724 against the Dollar and the Pound respectively. The Cedi extended its weekly gains against the Pound for the third time following uncertainties that has hit Britain’s divorce from the European Union (EU). After Britain missed the scheduled 29th March deadline to officially break away from the EU, investors grew weary about the future of the UK. With so much uncertainty hovering around UK’s departure from the EU, possible scenarios include a no deal, a deal-based exit and no Brexit at all. Against the Euro, the Cedi lost 0.32% to trade at GHC 5.7284 at the start of the week from previous week’s trade value of GHC 5.7102.
On the Open Forex Market (oanda.com), the Cedi posted gains against all three major trading partner currencies as it appreciated by 3.24%, 3.44% and 3.06% against the Dollar, the Pound and the Euro respectively. It began the week trading at GHC 5.1748, GHC 6.7569 and GHC 5.8197 from previous week’s trade value of GHC 5.3482, GHC 6.9974 and GHC 6.0033 against the Dollar, the Pound and the Euro respectively. The Dollar lost to a host of currencies including the Cedi as recent strong economic data eased worries about the global economy, prompting investors to reduce their greenback holdings for emerging market assets, according to a Reuters report.
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 5.0875 [April 8th, 2019] indicating a 5.35% 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 5.1748 [April 8th, 2019], representing a 6.08% year-to-date depreciation of the Cedi against the US Dollar.