Currency News for March 23rd 2020

As the central bank of Ghana moves to implement several stimulus packages in a bid to contain the adverse impact of the spreading coronavirus, the Ghanaian Cedi opened the week posting a mixed performance against its three major trading partner currencies. The Bank of Ghana last week cut its key lending rate by 150 basis points (bps) from 16.0% to 14.5% and also reduced commercial banks’ primary reserve requirement from 10% to 8%.

Data released by the Bank of Ghana (BoG) after the conclusion of its Monetary Policy Committee (MPC) meeting indicated the central bank remains in a position to continue to support the local currency through its forex forward auctions as Ghana’s total exports continue to suppress imports. The data showed that as of February, Ghana’s export earnings stood at USD 2.76 billion as against imports of USD 1.98 billion. These positive developments consequently led to a jump in the Gross International Reserves from USD 8.42 billion as of the close of last year to USD 10.04 billion in February.

On the BoG inter-bank trading platform, the Cedi lost 0.63% to the Dollar as the scramble for the world’s most liquid currency continues to surge amid financial market uncertainty. The Dollar traded at GHC 5.3740 at the start of the week against the Cedi from previous week’s trading figure of GHC 5.3403. Against the British Pound and the Euro, the Cedi remained resilient to build on previous week’s gains against the pair. The Cedi appreciated by 5.03% and 2.29% to trade at GHC 6.2424 and GHC 5.8015 at the start of the week from previous week’s trade values of GHC 6.5728 and GHC 5.9375 against the Pound and the Euro respectively.

On the Open Forex Market (oanda.com), the Cedi dipped by 1.97% against the Dollar to start the week at GHC 5.6952 from previous week’s trade value of GHC 5.5853. It, however, gained 3.88% and 1.88% against the Pound and the Euro to trade at GHC 6.6021 and GHC 6.1126 at the start of the week from previous week’s trade values of GHC 6.8686 and GHC 6.2300. The Cedi rose against the Pound for the second consecutive time this week as investors remained wary of Britain’s approach to dealing with the coronavirus pandemic. According to currency analysts, the UK’s large current account deficit has also exposed the Pound to vulnerabilities.

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 5.3740 [March 23rd, 2020] indicating a 2.94% 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 5.6952 [March 23rd, 2020], representing a 0.02% year-to-date appreciation of the Cedi against the US Dollar.