Currency News for August 31st 2020

The Ghanaian Cedi lost traction at the start of the week as it fell against its three major trading partner currencies on the Bank of Ghana (BoG) inter-bank trading platform. After recording gains against the British Pound Sterling and the Euro last week, the Cedi failed to build on its gains against the Pound and the Euro as investors continue to take a cautious stance ahead of the December elections. On the Open Forex Market (oanda.com), the Cedi was mixed against the three as it recovered part of previous week’s losses against the US Dollar but failed to post gains against the Pound and the Euro.

Despite recording a year-to-date depreciation of 2.72% against the Dollar, the Cedi has comparatively remained strong against most of its trading partner currencies to date compared to its performance over the same period in the past five years. A strong Gross International Reserves which stood at USD 9.2 billion (4.3 months of import cover) as of the close of the first half of the year compared to a USD 8.4 billion (4.0 months of import cover) over the same period last year has remained supportive of the Cedi’s resilience so far in the year.

On the BoG inter-bank trading platform, the Cedi depreciated by 0.02%, 2.34%, and 1.17% to begin the week trading at GHC 5.6876, GHC 7.6038, and GHC 6.7952 from previous week’s trade values of GHC 5.6862, GHC 7.4302, and GHC 6.7169 against the Dollar, the Pound, and the Euro respectively. The single currency gained against most of its trading pairs after data showed that manufacturing and services activities in Germany picked up steam, boosting hopes that the Eurozone’s largest economy is set for a strong recovery amid the COVID-19 pandemic.

On the Open Forex Market (oanda.com), the Cedi appreciated by 0.11% against the Dollar to trade at GHC 5.7889 at the start of the week from previous week’s trade value of GHC 5.7950. The Cedi gathered momentum against the greenback after the US Fed outlined an accommodative policy change that is believed could lead to inflation moving slightly higher whilst US interest rates remain at record lows into the foreseeable future. Against the Pound and the Euro, the Cedi lost by 1.87% and 0.89% to trade at GHC 7.7271 and GHC 6.9032 at the start of the week from GHC 7.5851 and GHC 6.8424 traded last week.

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 5.6876 [August 31st, 2020] indicating a 2.72% 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 5.7889 [August 31st, 2020], representing a 1.63% year-to-date depreciation of the Cedi against the US Dollar.