Currency News for August 23, 2021

The Ghana Cedi posted a mixed performance 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). It opened the week extending its week-on-week losses against the Dollar for the fourteenth consecutive time. It however maintained its footing as it built on last week’s gain against the Pound.

The Cedi has come under persistent pressure in the second half of the year amid tight liquidity conditions as demand for forex by importers and businesses continue to surge. Ghana’s central bank, however, remains in a good position to intervene in the currency space to support the local currency in the event of demand shocks. Currently, the country’s Gross International Reserves stands at USD 11.0 billion (equivalent to 5.0 months of import cover) as of the close of the first half of the year. The country’s reserves are expected to receive a boost as Ghana takes delivery of US 1.0 billion in the form of a Special Drawing Rights allocation from the IMF.

On the BoG inter-bank trading platform, the Cedi weakened by 0.18% to trade at GHC 5.8365 at the start of the week from last week’s opening trade value of GHC 5.8260. The Dollar gained against a host of peer currencies after a US Fed document hinted of a possibility of starting to cut back its pandemic-era monetary stimulus later this year, a condition which will boost the Dollar’s appeal. Against the Pound and the Euro, the Cedi registered gains of 0.74% and 0.19% as it began the week trading at GHC 8.0100 and GHC 6.8509 from last week’s open trade figures of GHC 8.0696 and GHC 6.8642 respectively.

On the Open Forex Market (oanda.com), the Cedi depreciated by 0.57% and 0.11% as it traded at GHC 6.0483 and GHC 7.0943 at the start of the week from last week’s opening trade values of GHC 6.0138 and GHC 7.0867 against the Dollar and the Euro respectively. The Cedi came in strong against the Pound, posting a gain of 0.63% to open the week at GHC 8.2779 from last week’s open trade figure of GHC 8.3307. The Pound weakened against several peers after UK inflation figure missed expectations whilst increases in COVID infections cast a gloomy picture of the UK’s economic recovery path.

According to the BoG 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 5.8365 [August 23rd, 2021] indicating a 1.27% year-to-date (ytd) 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 6.0483 [August 23rd, 2021], representing a 2.71% ytd depreciation against the US Dollar.