Currency News for February 22nd 2021

As risk appetite improves following the gradual roll out of COVID-19 vaccines, investors are beginning to unwind their investments in safe-haven currencies and assets. The Cedi at the start of the week continued its run against the US Dollar on both the Bank of Ghana (BoG) inter-bank trading platform and on the Open Forex Market (oanda.com). The Cedi, however, failed to recover against the British Pound Sterling which is on a rollercoaster ride against most of its trading pairs.

The Cedi’s resilient performance so far in the year has come on the back of foreign portfolio inflows as offshore investors throng to local equities and government bonds where returns are beginning to strengthen as the Cedi stabilizes. Low demand for the Dollar as has been observed from the BoG’s forward forex rates auction has also been supportive of the Cedi’s resilience.

On the BoG inter-bank trading platform, the Cedi gained by 0.11% against the Dollar to open the week trading at GHC 5.7565 against last week’s trade figure of GHC 5.7626. The Dollar’s retreat against most of its trading pairs comes on the back of growing belief that the US will go further than necessary to support the economy with government spending and easy money policies which may result in too much inflation and debt. Against the Pound and the Euro, the Cedi depreciated by 1.00% and 0.08% to trade at GHC 8.0936 and GHC 6.9923 at the start of the week from previous week’s trade values of GHC 8.0134 and GHC 6.9864 respectively.

On the Open Forex Market (oanda.com), the Cedi soared by 0.55% and 0.51% to trade at GHC 5.7824 and GHC 7.0183 at the start of the week from previous week’s trade values of GHC 5.8142 and GHC 7.0541 against the Dollar and the Euro respectively. The Cedi tumbled against the Pound by 0.43% this week as it traded at GHC 8.1183 at the start of the week against last week’s opening trade value of GHC 8.0832. The Pound strengthened against the Cedi on the back of growing optimism around the UK economy buoyed by impressive early rollout of the COVID-19 vaccine which is expected to enable the UK to reopen its economy earlier than expected.

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 5.7565 [February 22nd, 2021] indicating a 0.11% year-to-date appreciation. 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 5.7824 [February 22nd, 2021], representing a 1.80% year-to-date appreciation of the Cedi against the US Dollar.