Currency News for January 25th 2021

As risk aversion continues to dominate investors’ sentiments following a continuous rise in COVID-19 cases, the Ghanaian Cedi this week registered losses against its three major trading pairs on the Bank of Ghana (BoG) inter-bank trading platform. On the Open Forex Market (oanda.com), the Cedi extended its weekly gains against the US Dollar for the second consecutive but failed to build on previous week’s gains against the British Pound Sterling and the Euro.

The Cedi’s performance in the remainder of the quarter will be largely shaped by investor’s reaction to the government’s intention to return to the international market to raise funding to support its 2021 budget implementation and to retire some existing Eurobonds. Unlike previous years, the government intends to raise USD 5.0 billion through a collection of instruments comprising Eurobond, diaspora bond, sustainable bonds, and syndicated term loans. A buoyant expression of interest in these assets should improve Ghana’s forex reserves to enable the central bank to steadily render support to the local currency.

On the BoG inter-bank trading platform, the Cedi lost 0.02%, 0.69%, and 0.42% to begin the week trading at GHC 5.7645, GHC 7.8766, and GHC 6.9877 from previous week’s opening trade values of GHC 5.7632, GHC 7.8229, and GHC 6.9587 against the Dollar, the Pound, and the Euro respectively. Investors retreated to the safe-haven Dollar as investor sentiments remain dampened by rising COVID-19 cases, delays in vaccine supplies, and uncertainty over a USD 1.9 trillion US stimulus plan.

On the Open Forex Market (oanda.com), the Cedi further strengthened by 0.08% to trade at GHC 5.8490 at the start of the week from previous week’s trade figure of GHC 5.8536. Against the Pound and the Euro, the Cedi plummeted by 0.78% and 0.60% to open the week trading at GHC 8.0044 and GHC 7.1099 from previous week’s trade values of GHC 7.9424 and GHC 7.0676 respectively. The Pound was boosted by a positive inflation figure in the UK after inflation ended 2020 at 0.6%, up from 0.3% in the previous month, giving an indication that economic recovery in UK could be achieved faster than anticipated.

According to the Bank of Ghana inter-bank rates, the Ghanaian Cedi began the year 2021 at GHC 5.7631 [January 4th, 2021] against the US Dollar and is currently selling at GHC 5.7645 [January 25th, 2021] indicating a 0.02% year-to-date depreciation. Similarly, on the Open Forex Market (oanda.com), the Ghanaian Cedi traded at GHC 5.8885 [January 4th, 2020] and is currently trading at GHC 5.8490 [January 25th, 2021], representing a 0.67% year-to-date appreciation of the Cedi against the US Dollar.