Currency News for March 16th 2020

The Ghanaian Cedi at the start of the week posted a mixed performance 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) as Ghana begins to examine the potential impact of the spreading virus on the local economy. The Cedi after two months of rally, began to erase some of its gains in March as investors panicked and sold emerging market assets and currencies. The local currency, however, posted significant gains against the British Pound Sterling and fell against the US Dollar this week.

The Cedi’s performance this week comes after the BoG sold its target amount of USD 40.00 million in its recent forex forward rates auction held on 10^th March. Although the total amount of bids received was twice in excess of the target amount at USD 82.35 million, last week’s auction reassured players of the readiness of the central bank to continue to improve liquidity in the local currency market. At the last auction held on late February, the central bank sold USD 25.00 million against its target amount of USD 40.00 million.

On the BoG inter-bank trading platform, the Cedi lost 0.65% to trade at GHC 5.3403 from previous week’s trade figure of 5.3057 against the Dollar. The greenback gained against most of its trading pairs including the Cedi as investors and traders scrambled for liquidity and the world’s reserve currency despite the US Fed slashing US rates to near zero. The Cedi, however, appreciated by 5.76% and 2.04% against the Pound and the Euro to trade at GHC 6.5728 and GHC 5.9375 from previous week’s trade values of GHC 6.9748 and GHC 6.0614 respectively.

On the Open Forex Market (oanda.com), the Cedi repeated similar trading performance as seen on the inter-bank market. It depreciated by 2.03% against the Dollar to begin the week at GHC 5.5853 from previous week’s trade value of GHC 5.4743. Against the Pound and the Euro, the Cedi gained 4.26% and 0.39% to trade at GHC 6.8686 and GHC 6.2300 at the start of the week from previous week’s trade values of GHC 7.1742 and GHC 6.2546 respectively. The Pound failed to post gains against the Cedi and other trading pairs despite numerous stimulus measures announced by the UK government, including a 50 basis points interest rate cut and a GBP 30 billion economic stimulus plan.

According to the Bank of Ghana inter-bank rates, the Ghanaian Cedi began the year 2020 at GHC 5.5370 [January 2nd, 2020] against the US Dollar and is currently selling at GHC 5.3403 [March 16th, 2020] indicating a 3.55% 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 5.5853 [March 16th, 2020], representing a 1.94% year-to-date appreciation of the Cedi against the US Dollar.