Currency News for November 23rd 2020

News of a potential vaccine for the novel Coronavirus failed to give the Cedi some bit of a respite despite a gradual improvement in appetite for risky assets and currencies. The Ghanaian Cedi at the start of the week posted a mixed performance 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 comes after the monetary policy committee of the BoG kept its key rate unchanged at 14.5% in an effort to make investments in local assets attractive.

Ghana’s rising public debt stock which currently stands at GHC 273.8 billion after GHC 54.8 billion was added in the first nine months of 2020 is likely to cause uneasiness among offshore investors who may stay off local assets or unwind their portfolio in local assets. Latest central bank data revealed that Ghana’s debt-to-GDP ratio rose to 71.0%, increasing the chances of Ghana being classified as a debt distressed country.

On the BoG inter-bank trading platform, the Cedi depreciated by 0.02% and 0.71% to trade at GHC 5.7159 and GHC 7.5947 at the start of the week from previous week’s opening figures of GHC 5.7149 and GHC 7.5408 against the US Dollar and the British Pound Sterling respectively. The Dollar built on previous week’s gains against the Cedi after data showed that US business activity expanded at the fastest rate in over five years in November. Against the Euro, the Cedi surged by 0.18% to begin the week trading at GHC 6.7526 from a trade value of GHC 6.7648 posted last week.

On the Open Forex Market (oanda.com), the Cedi gained by 0.04% to begin the week trading at GHC 5.8480 from GHC 5.8506 posted last week against the Dollar. It, however, failed to recover against the Pound and the Euro as it depreciated by 0.95% and 0.11% trading at GHC 7.7978 and GHC 6.9385 at the start of the week from previous week’s trade values of GHC 7.7247 and GHC 6.9306. The Pound rose against a basket of currencies including the Cedi on hopes that the UK and the EU would clinch a Brexit trade deal.

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 5.7159 [November 23rd, 2020] indicating a 3.23% 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 5.8480 [November 23rd, 2020], representing a 2.67% year-to-date depreciation of the Cedi against the US Dollar.