Currency News for October 12th 2020

Offshore investors’ participation in the Government’s recent 2-year and 3-year fixed-rate assets failed to calm demand pressures for forex at the expense of the local currency as the Ghana Cedi fell across the board 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).

The Cedi’s performance at the start of the week comes on the back of signs of increasing demand for forex by importers ahead of the Christmas festivities. Results from the most recent forex forward rates auction showed bids coming in excess of 3.03 times the target amount, higher than the average bid cover ratio of 2.67 times in September and August. It is, however, expected that the USD 1.30 billion cocoa syndicated loan facility will strengthen Ghana’s Gross International Reserves to enable the central bank to shore up the supply of forex to meet the rising demand.

On the BoG inter-bank trading platform, the Cedi fell by 0.01%, 0.75%, and 0.16% to begin the week trading at GHC 5.7061, GHC 7.4544, and GHC 6.7351 from previous week’s trade values of GHC 5.7058, GHC 7.3992, and GHC 6.7241 against the US Dollar, the British Pound Sterling, and the Euro respectively. The Dollar added to its gains against the Cedi as rising coronavirus infections in some parts of the Americas and Europe pushed investors to buy the safe-haven currency.

On the Open Forex Market (oanda.com), the Cedi dipped by 0.11%, 0.77%, and 0.56% to trade at GHC 5.8247, GHC 7.5988, and GHC 6.8802 at the start of the week from previous week’s trade figures of GHC 5.8183, GHC 7.5406, and GHC 6.8421 against the Dollar, the Pound, and the Euro respectively. The Cedi lost momentum to recover from previous weeks’ losses against the Pound as hopes of a Brexit deal boosted demand for the Pound.

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 5.7061 [October 12th, 2020] indicating a 3.05% 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 5.8247 [October 12th, 2020], representing a 2.26% year-to-date depreciation of the Cedi against the US Dollar.