Currency News for December 21st 2020

The Ghanaian Cedi remained calm this week against the US Dollar despite heightened political tensions following the refusal of the main opposition party in the just ended December elections to accept the results. The Cedi began the week set to end the year with its biggest performance against the Dollar in more than 5 years as political tensions coupled with rising demand for forex poses minimal threat to the Cedi’s outlook. The local currency’s resilient performance against most of its major trading partner currencies in 2020 has come on the back of some favourable policies implemented by the central bank.

The Cedi in the remaining days of the year will, however, be expected to be pressured to maintain its stability as the impact of the coronavirus pandemic cast doubts about the economy’s recovery to positive growth. Latest provisional GDP figures released by the Ghana Statistical Service showed that the Ghanaian economy contracted for the second consecutive time in the third quarter of the year as growth figures was reported at -1.1%.

On the Bank of Ghana inter-bank trading platform, the Cedi lost by 0.06% and 0.51% to trade at GHC 5.7221 and GHC 6.9858 at the start of the week from previous week’s trade values of GHC 5.7184 and GHC 6.9502 against the Dollar and the Euro respectively. The Cedi, however, came in strong to post gains against the British Pound Sterling as it climbed by 0.38% to begin the week at GHC 7.6138 against GHC 7.6432 traded last week. The Pound fell against a host of its trading pairs including the Cedi as more countries cut transport ties with Britain, where a fast-spreading new strain of the coronavirus had been discovered.

On the Open Forex Market (oanda.com), the Cedi depreciated by 0.33%, 0.33%, and 0.84% to begin the week trading at GHC 5.8989, GHC 7.8762, and GHC 7.2009 from previous week’s trade figures of GHC 5.8796, GHC 7.8505, and GHC 7.1411 against the Dollar, the Pound, and the Euro respectively. The Dollar rose this week to recover from its previous week’s 10 basis points dip against the Cedi after the US Fed announced that it will continue its quantitative easing until the US economy substantially improves.

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 5.7221 [December 21st, 2020] indicating a 3.34% 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 5.8989 [December 21st, 2020], representing a 3.56% year-to-date depreciation of the Cedi against the US Dollar.