Currency News For October 7th, 2019

After a brief recovery, the Ghanaian Cedi failed to build on previous week’s gains as it lost momentum at the start of the week and erased part of its gains against its three major trading partner currencies on the Bank of Ghana (BoG) inter-bank trading platform. The local currency last week rose against the US Dollar, the British Pound Sterling, and the Euro after the BoG announced that it will begin forex forward contracts. It, however, erased part of previous week’s gains after the BoG sold USD 16.75 million in its maiden forex forward deal against a total of USD 51.73 million tenders. On the Open Forex Market (oanda.com), the Cedi recorded a mixed performance against the Dollar, the Pound, and the Euro.

After the first tranche of the USD 1.30 billion cocoa syndicated loan facility hit the accounts of the central bank, liquidity on the currency market is expected to improve to give the BoG the space to increase its forex forward sales. The first tranche of USD 600 million will further strengthen the country’s Gross International Reserves (GIR) which currently stands at USD 8.2 billion (equivalent to 4.1 months of import cover) and should give the Cedi some respite in the coming weeks. The remaining two tranches are expected to be received before the close of the year.

On the BoG inter-bank trading platform, the Cedi depreciated by 0.08%, 0.22% and 0.92%, week-on-week, to trade at GHC 5.3228, GHC 6.5592, and GHC 5.8507 at the start of the week from previous week’s trading values of GHC 5.3188, GHC 6.5447, and GHC 5.7974 against the Dollar, the Pound and the Euro respectively. The Cedi lost against the Pound despite doubts that the British Prime Minister’s final Brexit offer would be accepted by the European Union, a few weeks to the deadline for the UK to leave the bloc.

On the Open Forex Market (oanda.com), the Cedi posted gains against the Dollar and the Pound but lost against the Euro. It appreciated by 0.18% and 0.06% to begin the week trading at GHC 5.4334 and GHC 6.6904 from previous week’s trading figures of GHC 5.4430 and GHC 6.6947 against the Dollar and the Pound respectively. The greenback fell against a host of currencies including the Cedi after US manufacturing and services data underperformed, signaling a slowdown in the US. Against the Euro, the Cedi fell by 0.40% to trade at GHC 5.9660 at the start of the week from previous week’s trade value of GHC 5.9425.

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 5.3228 [October 7th, 2019] indicating a 10.22% 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 5.4334 [October 7th, 2019], representing an 11.39% year-to-date depreciation of the Cedi against the US Dollar.