Currency News For November 25th, 2019

The Ghanaian Cedi posted a mixed performance against its three major trading partner currencies on the Bank of Ghana (BoG) inter-bank trading platform after a decision by the Monetary Policy Committee (MPC) of the BoG to stall its key lending rate at 16.0% for the fifth consecutive time. The MPC kept the policy rate unchanged at its last meeting for the 2019 fiscal year as risks to the inflation outlook were broadly balanced whilst in an attempt to contain risks to the fiscal consolidation path. On the Open Forex Market (oanda.com), the Cedi continued to nurse losses as it built on previous week’s lows against the US Dollar, the British Pound Sterling, and the Euro. It fell to an all-time low against the Dollar and was on course to touch an 8-month and a 5-month low against the Pound and the Euro respectively.

As the year draws to a close characterized with increased imports and corporate income repatriation which tends to weigh on the Cedi, the local currency will be expected to be pressured to sustain its mild depreciation following gains made in Ghana’s Gross International Reserves (GIR). According to data released by the BoG, Ghana’s GIR surged by USD 1.67 billion to USD 8.70 billion as at mid-November, 2019 as compared to USD 7.02 billion at the start of the year. These positive gains came on the back of favourable commodity prices and increased production of Ghana’s exports which impacted positively on the trade account. The robust GIR gives an indication that the BoG will be better positioned to support the Cedi when demand for forex rises above expectations.

On the BoG inter-bank trading platform, the Cedi fell against the Dollar to extend its weekly losses to 5 weeks. It weakened by 0.26% to trade at GHC 5.3801 at the start of the week from previous week’s trade value of GHC 5.3660. Against the Pound and the Euro, the Cedi gained 0.19% and 0.27% to begin the week trading at GHC 6.9403 and GHC 5.9258 from previous week’s trade values of GHC 6.9532 and GHC 5.9419 respectively. The Cedi recovered part of previous week’s loss posted against the Pound after recent gloomy Purchasing Managers’ Index (PMI) data revealed the weak state of the UK economy and underscored the low likelihood of rates hikes in the near future.

On the Open Forex Market (oanda.com), the Cedi fell by 0.92%, 0.36%, and 0.47% to begin the week at GHC 5.6101, GHC 7.2242, and GHC 6.1806 from previous week’s trade figures of GHC 5.5587, GHC 7.1980, and GHC 6.1519 against the Dollar, the Pound and the Euro respectively. The Dollar gained against a basket of currencies including the Cedi following increased trade tensions which have mainly been supportive of the Dollar as investors view the US to be better placed to weather a trade war.

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 5.3801 [November 25th, 2019] indicating an 11.41% 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 5.6101 [November 25th, 2019], representing a 15.01% year-to-date depreciation of the Cedi against the US Dollar.