The Ghanaian Cedi at the start of the week lost traction to post gains 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 a brief impressive performance to reverse its heavy depreciation recorded in the first quarter of the year, is gradually trending on a losing streak against the US Dollar, the British Pound Sterling and the Euro. It has nursed four weeks of consecutive losses against the greenback on the BoG inter-bank platform.
The Cedi’s recent performance comes despite a strong growth projection by the International Monetary Fund (IMF). According to the IMF, Ghana is set to be fastest growing economy in the world with a growth forecast of 8.8% in 2019. The international lending institution believes that Ghana would record an impressive economic growth despite a slow growth of the world economy. This positive projection is expected to boost investors’ confidence to the local economy in bid to increase foreign direct investment.
On the BoG inter-bank trading platform, the Cedi depreciated by 0.02%, 1.31% and 0.30% to begin the week at GHC 5.0917, GHC 6.6661 and GHC 5.7014 from previous week’s trade values of GHC 5.0906, GHC 6.5801 and GHC 5.6843 against the Dollar, the Pound and the Euro respectively. The Cedi fell to its lowest in 7 weeks against the Dollar at the start of the week after the US Federal Reverse said that the current policy stance is appropriate, calming earlier expectations of a cut in the US policy rate. The chairman of the Fed noted that the forces that weighed on US inflation may be transitory, thus boosting investors’ confidence in the US economy.
On the Open Forex Market (oanda.com), the Cedi registered losses against the Dollar, the Pound and the Euro as it began the week depreciating by 0.27%, 1.67%, and 0.53% respectively. It traded at GHC 5.1701, GHC 6.7781, and GHC 5.7879 at the start of the week from previous week’s trade values of GHC 5.1562, GHC 6.6668 and GHC 5.7573 against the Dollar, the Pound and the Euro respectively. The Cedi failed to recover from previous week’s loss against the Pound after the Bank of England unanimously kept its interest rate unchanged at 0.75% at its latest sitting but warned that a rate hike in the future was certain. The Bank also lifted its growth forecasts about the UK economy. The Pound was also supported this week by progress of Brexit talks between the UK government and the main opposition party as the two aims to break a deadlock in UK’s parliament.
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 5.0917 [May 6th, 2019] indicating a 5.44% 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 5.1701 [May 6th, 2019], representing a 5.99% year-to-date depreciation of the Cedi against the US Dollar.