Currency News for July 26th 2021

Ahead of the presentation of the mid-year budget review to Ghana’s parliament later in the week, the Cedi fell across the board against its three major trading partner currencies on both the Bank of Ghana (BoG) inter-bank trading platform and the Open Forex Market (oanda.com). Against the US Dollar, the Cedi sustained its tenth consecutive weekly loss this week signaling mounting pressure on the local currency over the past three months.

The posture of the government in the mid-year budget towards the Cedi’s recent performance will signal if the government is concerned about the Cedi’s weakness or whether the government favours the weakening performance. The government must devise strategies to maintain a favourable level of depreciation to limit a potential ballooning of the external component of Ghana’s debt stock. Ghana currently risks being labeled as a debt-distressed country after recent data released by the central bank puts Ghana’s debt-to-GDP ratio at 76.6% as of May.

On the BoG inter-bank trading platform, the Cedi retreated by 0.07%, 1.20%, and 0.12% to begin the week trading at GHC 5.8032, GHC 8.0229, and GHC 6.8537 from last week’s opening trade values of GHC 5.7992, GHC 7.9281, and GHC 6.8458 against the Dollar, The British Pound Sterling, and the Euro respectively. The Dollar added to its previous weeks’ gains against the local currency as safe-haven flows appear to be continuing to flow into US bond markets by international investors amid concerns about the impact of the delta-variant on global recovery.

On the Open Forex Market (oanda.com), the Cedi plunged by 0.35%, 0.93%, and 0.32% to trade at GHC 5.9795, GHC 8.2458, GHC 7.0518 at the start of the week from last week’s opening trade figures of GHC 5.5988, GHC 8.1696, and GHC 7.0292 against the Dollar, the Pound, and the Euro respectively. The Pound rose against a host of its trading pairs after the UK relaxed its health restrictions, allowing the economy to operate at its full capacity.

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 5.8032 [July 26th, 2021] indicating a 0.70% year-to-date depreciation. Similarly, on the Open Forex Market (oanda.com), the Ghanaian Cedi traded at GHC 5.8885 [January 4th, 2021] and is currently trading at GHC 5.9795 [July 26th, 2021], representing a 1.55% year-to-date depreciation of the Cedi against the US Dollar.