Currency News for February 1st 2021

The Ghanaian Cedi rose this week to recover from previous week’s dip against the US Dollar on the Bank of Ghana (BoG) inter-bank trading platform as demand for the Dollar eased. A recent document released by the central bank showed that demand for the Dollar during the January 26 forex forward rates auction came in at 2.59 times the target amount which compares with a bid cover ratio of 2.76 times in mid-January and 3.09 times in December, 2020. The Cedi also registered gains against the Euro but failed to post gains against the British Pound Sterling.

After the conclusion of the first monetary policy committee in 2021, the governor of the central bank noted that Ghana’s Gross International Reserves (GIR) stood at USD 8.62 billion, providing 4.1 months of import cover, as at the close of 2020 which compares to USD 8.42 billion over the same period in 2019. The strong GIR despite the ravaging impact of the COVID-19 pandemic on the local economy came on the back of high revenues generated from gold and cocoa as a result of favourable prices and production volume. The strong forex reserve position should further strengthen the hands of the BoG to continue to support the local currency in the first quarter of the year.

On the BoG inter-bank trading platform, the Cedi strengthened by 0.02% and 0.24% to open the week trading at GHC 5.7635 and GHC 6.9709 from previous week’s trade values of GHC 5.7645 and GHC 6.9877 against the Dollar and the Euro respectively. Against the Pound, the Cedi tumbled by 0.12% to trade at GHC 7.8862 at the start of the week from previous week’s trade figure of GHC 7.8766. Sterling climbed against a host of its trading pairs after employment data in the UK outperformed expectations whilst significant progress in its COVID-19 vaccination program remained supportive of the Pound’s performance.

On the Open Forex Market (oanda.com), the Cedi appreciated by 0.03% and 0.52% to trade at GHC 5.8472 and GHC 7.0728 at the start of the week from previous week’s trade values of GHC 5.8490 and GHC 7.1099 against the Dollar and the Euro respectively. The Cedi recorded gains against the single currency after initial Eurozone GDP estimates showed that the EU economy contracted in the fourth quarter of 2020 and is further heading for another steeper decline in the first quarter of 2021. The Cedi lost by 0.10% against the Pound to trade at GHC 8.0125 at the start of the week from previous week’s trade value of GHC 8.0044.

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 5.7635 [February 1st, 2021] indicating a 0.01% 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 5.8472 [February 1st, 2021], representing a 0.70% year-to-date appreciation of the Cedi against the US Dollar.