Currency News for August 3rd 2020

The Ghanaian Cedi at the start of the week further extended its losing streak against some of its major trading partner currencies after news that cocoa prices on the international market are expected to dip by at least 10% at the end of the year amid higher production cost and a hit to demand arising from lockdown restrictions. Proceeds from the sale of cocoa beans have traditionally been used to shore up Ghana’s forex reserves and subsequently to support the local currency.

But the Bank of Ghana (BoG) has indicated that it intends to implement a medium-term strategy to curb the free fall of the Cedi against some of its major trading currencies. Commenting on the Cedi’s performance in the first half of the year, the governor of the BoG noted that the central bank is embarking on steps to build additional reserves of up to GHC 300.00 million in forex to give respite to the local currency.

On the BoG inter-bank trading platform, the Cedi depreciated by 0.01%, 1.43%, and 0.43% to begin the week trading at GHC 5.6815, GHC 7.4252, and GHC 6.7111 from previous week’s trade values of GHC 5.6807, GHC 7.3202, and GHC 6.6821 against the US Dollar, the British Pound Sterling, and the Euro respectively. The Cedi was little changed against the Dollar after data showed that the US economy contracted by over 30% in the second quarter of the year, the sharpest dive since the Great Depression.

On the Open Forex Market (oanda.com), the Cedi similarly fell across the board against its three major trading partner currencies. It dipped by 0.12%, 1.75%, and 0.33% to trade at GHC 5.8003, GHC 7.5787, and GHC 6.8181 at the start of the week from previous week’s trade values of GHC 5.7936, GHC 7.4487, and 6.7954 against the Dollar, the Pound, and the Euro respectively. The Euro extended its weekly gains against the Cedi for the sixth consecutive time as business activities in the Eurozone began to pick up following the lifting of many restrictions imposed to curb the spread of the coronavirus.

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 5.6815 [August 3rd, 2020] indicating a 2.61% 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 5.8003 [August 3rd, 2020], representing a 1.83% year-to-date depreciation of the Cedi against the US Dollar.