The Ghanaian Cedi this week continued to remain under intense pressure against the US Dollar on the Bank of Ghana (BoG) inter-bank trading platform extending its weekly losses to nine weeks in a row. The Cedi has been under pressure against its three major trading partner currencies in recent times as investors flee from emerging market assets following uncertainties surrounding US-China trade-disputes. On the Open Forex Market (oanda.com), the Cedi posted a mixed performance against the US Dollar, the British Pound Sterling, and the Euro. This week’s performance comes ahead of the announcement of the inflation rate for May, 2019 where the consumer price index is not expected to post any major swing from the 9.5% reported in April.
The Cedi is expected to continue to post a downward trajectory on concerns of rising debt stock. According to data released by the BoG, Ghana’s debt stock rose to GHC 198.0 billion representing 57.5% of Gross Domestic Product (GDP) at the close of March, 2019 up from GHC 147.9 billion representing 49.5% of GDP same period last year. Of the total current public debt stock, 53% representing GHC 105.2 billion are debts owed externally where investors are growing weary that the marginal depreciation of the Cedi could further worsen Ghana’s total public debt stock.
On the BoG inter-bank trading platform, the Cedi failed to post a comeback against all three major trading partner currencies as it further built on previous week’s decline. It began the week with a depreciation of 0.47%, 0.95%, and 1.43% to trade at GHC 5.2280, GHC 6.6343, and GHC 5.9135 from previous week’s trading figures of GHC 5.2035, GHC 6.5720 and GHC 5.8304 against the Dollar, the Pound and the Euro respectively. The Pound fell against other trading pairs but strengthened against the Cedi after UK data showed the British economy slowed sharply in April. The outlook for the Pound in the near term, however, continue to look gloomy as Prime Minister, Theresa May, steps down to be replaced by a more Eurosceptic leader.
On the Open Forex Market (oanda.com), the Cedi ended three weeks of losing streak against the Dollar as it gained momentum to post a 0.11% appreciation to trade at GHC 5.3794 at the start of the week from previous week’s trade value of GHC 5.3853. The Dollar fell against a host of currencies including the Cedi after recent US economic data pointed to a loss of momentum in economic activity bolstering rate-cut expectations. US jobs data released last week slowed where nonfarm payrolls rose by 75,000 jobs falling below expectations of 100,000. Against the Pound and the Euro, the Cedi extended its losses to three consecutive weeks. It depreciated by 0.27% and 0.85%, week-on-week, to trade at GHC 6.8297 and GHC 6.0846 from previous week’s trade values of GHC 6.8115 and GHC 6.0332 against the Pound and the Euro respectively.
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 5.2280 [June 10th, 2019] indicating an 8.26% 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 5.3794 [June 10th, 2019], representing a 10.28% year-to-date depreciation of the Cedi against the US Dollar.