Currency News for January 4th 2020

The Ghanaian Cedi after closing the previous year with an impressive year-to-date performance struggled to post gains 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) at the start of the first trading day of the new year. The local currency in 2020 defied the ravaging impact of the COVID-19 pandemic to post its biggest performance in more than 5 years as both sound fiscal and monetary policies remained supportive of the Cedi’s performance. It ended the year 2020 with a year-to-date performance of 4.08% against the US Dollar.

The Cedi has overtime experienced a sharp depreciation in the first quarter of each year as intense end-of-year forex-related activities spill over into the following year. However, with the incumbent government winning the recent elections as well as indications given by the central bank to continue its strategies that have widely been supportive of the local currency, it is expected that the Cedi will maintain a relatively stable performance in the first quarter of 2021. Already, the governor of the central bank has given an indication of building reserves to the tune of USD 300.00 million which should shore up proceeds to be realized from Ghana’s return to the Eurobond market later in the year.

On the BoG inter-bank trading platform, the Cedi slipped by 0.49%, 1.13%, and 0.55% to begin the first day of the week trading at GHC 5.7631, GHC 7.8257, and GHC 7.0718 from previous week’s opening trade values of GHC 5.7351, GHC 7.7383, and GHC 7.0329 against the Dollar, the British Pound Sterling, and the Euro respectively. The Pound rose against the Cedi after the UK secured a trade deal with the European Union calming fears of a disorderly breakoff from one of the largest trading blocs. News that trading platforms in the EU can be used by UK market participants for up to the first quarter to avoid disruptions to trading further strengthened the Pound against most of its trading pairs.

On the Open Forex Market (oanda.com), the Cedi remained unchanged at GHC 5.8885 at the start of the week compared to its trading figure at the start of the previous week against the Dollar. The Dollar was weakened against a host of its trading pairs as improving global economic outlook buoyed by the rollout of COVID-19 vaccines and US low interest rates and the ongoing Federal Reserve quantitative easing dented the greenback’s appeal. Against the Pound and the Euro, the Cedi tumbled by 1.04% and 0.15% to trade at GHC 8.0289 and GHC 7.2222 at the start of the week from GHC 7.9461 and GHC 7.2113 traded last week.