Currency News for June 22nd 2020

The Ghanaian Cedi extended its downward trajectory against the US Dollar on the Bank of Ghana (BoG) inter-bank trading platform after data showed that the Ghanaian economy slowed in the first quarter of 2020 to 4.9% as against a growth rate of 6.7% over the same period last year according to official data released by the Ghana Statistical Service. The decline in the economic growth rate was largely driven by a sharp fall in the construction sector as the country began to implement measures to contain the coronavirus disease. The Cedi, however, gained momentum to post gains against the British Pound Sterling and the Euro on both the BoG inter-bank trading platform and on the Open Forex Market (oanda.com).

News that some international lenders have declined to underwrite a USD 1.3 billion cocoa syndicated loan facility for the 2020/2021 crop season is also expected to further pose challenges to the local currency’s outlook. Proceeds from the cocoa syndicated loan facility have traditionally been used to boost the country’s reserves and subsequently to shore up the supply of forex into the local currency market. According to sources, the lenders’ cautious stance comes on the heels of uncertainties associated with the coronavirus pandemic.

On the BoG inter-bank trading platform, the Cedi tumbled by 0.04% to begin the week trading at GHC 5.6547 from previous week’s trade value of GHC 5.6527. The Cedi recorded its fourth consecutive weekly decline against the greenback as fears of a second wave of coronavirus infections, following spikes in some US states and in China, drove demand for the safe-haven currency. Against the Pound and the Euro, the Cedi gained 0.87% and 0.21% to trade at GHC 7.0384 and GHC 6.3644 at the start of the week from previous week’s trade figures of GHC 7.1004 and GHC 6.3778 respectively.

On the Open Forex Market (oanda.com), the Cedi lost by 0.07% to trade at GHC 5.8160 at the start of the week from previous week’s trade value of GHC 5.8121 against the Dollar. It, however, appreciated by 0.93% and 0.35% to trade at GHC 7.2242 and GHC 6.5302 at the start of the week from previous week’s trade values of GHC 7.2924 and GHC 6.5530 against the Pound and the Euro respectively. The Pound was weighed down by data which showed the UK government’s borrowing had hit record highs.

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 5.6547 [June 22nd, 2020] indicating a 2.13% year-to-date depreciation. 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 5.8160 [June 22nd, 2020], representing a 2.10% year-to-date depreciation of the Cedi against the US Dollar.