The Ghanaian Cedi at the start of the week gained momentum to recover parts of its recent weakness against its three major trading partner currencies on the Open Forex Market (oanda.com). The Cedi posted gains against the Dollar, the British Pound Sterling, and the Euro after it fell against all three sets last week. The Cedi is expected to receive a boost from offshore investors’ participation in the recent ESLA Plc 10-year bond issue which was marketed to both resident and non-resident investors. A total of GHC 1 billion was raised at a yield of 19.85%. On the Bank of Ghana (BoG) inter-bank trading platform, the Cedi continued to nurse losses against the Dollar, extending its weakly losses to thirteen weeks of consecutive losses. It, however, maintained its resilience to build on previous week’s gains against the Pound and the Euro.
The Cedi’s performance this week comes ahead of a 2019 mid-year budget review where it is expected that the government will announce support measures for the Cedi which has been under intense pressure, recording a depreciation of 8.96% and 11.65% in the first half of the year against the Dollar on the BoG inter-bank trading platform and on the Open Forex Market respectively. The government is also expected to announce measures to deal with the poor performance of domestic revenue and adopt avenues to bridge the 4.2% budget deficit.
On the BoG inter-bank trading platform, the Cedi depreciated marginally by 0.01%, week-on-week, to begin the week at GHC 5.2611 from previous week’s trade value of GHC 5.2606. The Dollar gained against a host of currencies including the Cedi after strong US jobs data scaled back investor’s expectations of a sharp Fed rate cut in July. US non-farm payrolls data rose by the highest in five months slashing expectations of a 50 basis point rate cut by the Fed. Against the Pound and the Euro, the Cedi appreciated by 1.06% and 0.87%, week-on-week, to trade at GHC 6.5848 and GHC 5.9004 from previous week’s trading value of GHC 6.6552 and GHC 5.9522 respectively.
On the Open Forex Market, the Cedi strengthened by 0.34%, 1.44%, and 1.23% to start the week at GHC 5.4278, GHC 6.7963, and GHC 6.0906 from previous week’s trade values of GHC 5.4463, GHC 6.8953 and GHC 6.1665 against the Dollar, the Pound, and the Euro respectively. The Cedi gained against the Pound, adding on to its recent gains as signs of an economic downturn in the UK mounted bets of a policy rate cut following a disappointing hard data. The threat of Britain crashing out of the European Union without a trade deal under the next leader and a deteriorating UK economy has been the main underlying factor in the Pound’s recent weakness.
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 5.2611 [July 8th, 2019] indicating an 8.95% 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 5.4278 [July 8th, 2019], representing an 11.27% year-to-date depreciation of the Cedi against the US Dollar.