Currency News For November 4th, 2019

At the start of the week, the Ghanaian Cedi remained under pressure as it recorded week-on-week losses against its three major trading partner currencies on both the Bank of Ghana (BoG) inter-bank trading platform and the Open Forex Market (oanda.com). The local currency had as at the close of the third quarter of the year posted its worst performance in three years as general confidence in the Cedi declined despite strong gains made in Ghana’s Gross International Reserves. It closed the third quarter of 2019 with a year-to-date loss of 10.14% compared to a year-to-date loss of 8.19% in 2018 and 4.62% in 2017 against the US Dollar. The situation persisted in the month of October.

In a Banking Sector Report issued by the BoG in the period to August, 2019, it was revealed depositors were increasingly converting Cedi deposits to foreign currency deposits. The report revealed that while overall deposits augmented by 12.2% to GHC 76.02 billion, Cedi deposits recorded a slower growth of 9.1% to GHC 54.81 billion while foreign currency deposits grew by 21.2% to GHC 21.21 billion over the same period. This trend, analysts warned could continue to mount selling pressure on the local currency.

On the BoG inter-bank trading platform, the Cedi lost 0.19%, 0.57%, and GHC 0.77%, week-on-week, to trade at GHC 5.3449, GHC 6.8997, and GHC 5.9629 at the start of the week from previous week’s trading values of GHC 5.3349, GHC 6.8606, and GHC 5.9174 against the US Dollar, the British Pound Sterling and the Euro respectively. The Dollar stayed strong against a host of trading pairs after the US Federal Reserve delivered its third rate cut in 2019 but signaled that further rate cuts may be put on hold. The greenback also gained on the back of upbeat US non-farm payroll data as well as hopes of a US-China trade deal.

On the Open Forex Market (oanda.com), the Cedi similarly fell against all three major trading partner currencies. It depreciated by 0.20%, 0.77%, and 0.76%, week-on-week, to begin the week trading at GHC 5.5142, GHC 7.1222, and GHC 6.1505 from previous week’s trade figures of GHC 5.5033, GHC 7.0676, and GHC 6.1045 against the Dollar, the Pound, and the Euro respectively. The Pound rose against the Cedi on rising optimism that a hard Brexit is likely to be avoided.

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 5.3449 [November 4th, 2019] indicating a 10.68% 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 5.5152 [November 4th, 2019], representing a 13.04% year-to-date depreciation of the Cedi against the US Dollar.