The Ghanaian Cedi, this week, maintained its resilient performance as it extended its recent gains against its three major trading partner currencies on both the Bank of Ghana (BoG) inter-bank trading platform and on the Open Forex Market (oanda.com). The Cedi’s performance this week comes as Ghana prepares to embark on a roadshow to raise USD 3.00 billion from the Eurobond market to support the 2020 budget. Proceeds from the Eurobond issuance will be expected to boost the nation’s Gross International Reserves in a bid to improve forex supply.
Confidence in the Ghanaian economy and the Cedi will be expected to improve after rating agency, Moody’s, revised Ghana’s economic outlook rating from stable to positive. The international rating agency also affirmed the country’s long-term issuer and senior unsecured bond ratings at B3. This development which is expected to boost investor confidence in the Ghanaian economy will also help Ghana to attain a good deal on its Eurobond. Moody’s explained that the decision to upgrade the Ghanaian economy comes on the back of rising confidence in the country’s institutions and policy settings which is to ensure fiscal stability.
On the BoG inter-bank trading platform, the Cedi appreciated for the second consecutive time this week against the Dollar and the Euro but failed to recover from previous week’s dip against the Pound. It appreciated by 0.23% and 0.89% to trade at GHC 5.5245 and GHC 6.0859 from previous week’s trading values of GHC 5.5370 and GHC 6.1350 against the Dollar and the Euro respectively. It, however, lost 0.26%, week-on-week, against the Pound as it began the week trading at GHC 7.2155 from previous week’s trade value of GHC 7.1969. The Pound gained momentum against the Cedi as concerns that the Bank of England (BoE) will lower its key rate at its January sitting recedes. This follows a series of improved UK economic data which reduced market expectations of a BoE rate cut.
On the Open Forex Market (oanda.com), the Cedi posted its third consecutive gain against its three major trading partner currencies. It rose by 1.34%, 0.84%, and 1.94%, week-on-week, to begin the week trading at GHC 5.5908, GHC 7.3042, and GHC 6.1635 from previous week’s trade figures of GHC 5.6668, GHC 7.3657, and GHC 6.2856 against the Dollar, the Pound, and the Euro respectively. The Cedi posted its fourth consecutive gain against the Euro this week as recent Purchasing Manager’s Index data disappointed. This added to a broader market concern that the European Central Bank will extend its loose monetary policy into the near future.
According to the Bank of Ghana inter-bank rates, the Ghanaian Cedi began 2020 at GHC 5.5370 [January 2nd, 2020] against the US Dollar and is currently selling at GHC 5.5245 [January 27th, 2020] indicating a 0.23% year-to-date appreciation. Similarly, on the Open Forex Market (oanda.com), the Ghanaian Cedi traded at GHC 5.6961 [January 2nd, 2020] and is currently trading at GHC 5.5908 [January 27th, 2020], representing a 1.85% year-to-date appreciation of the Cedi against the US Dollar.