Currency News for December 20, 2021

Fast spreading Omicron jitters coupled with increasing demand for forex sent the Ghana Cedi tumbling against its three major trading partner currencies on both the Bank of Ghana (BoG) inter-bank trading platform and the Open Forex Market. Risk aversion as Omicron cases soar in some advanced countries saw investors retreat from risky and emerging market currencies to take solace in save-havens.

The BoG’s increased intervention in the currency market continues to face headwinds amidst a strong pickup in demand for forex by importers and businesses. The past three weeks have seen bids submitted for the BoG’s weekly forex forward rates auctions come in excess of four times the offer amount. A European Investment Bank’s €82.50 million concessional funding package to Ghana to strengthen health care will be expected to shore up the country’s forex reserves to enable the central bank to sustain the local unit.

On the BoG inter-bank trading platform, the Cedi fell across the board as it weakened by 0.37%, 0.09%, and 0.44% to open the week quoted at GHC 5.9568, GHC 7.8701, and GHC 6.7277 from last week’s opening quote of GHC 5.9346, GHC 7.8633, and GHC 6.6979 against the Dollar, the Pound, and the Euro respectively. The Pound’s appeal rose after the Bank of England became the first G7 central bank to lift interest rates since the start of the pandemic.

The Cedi failed to hold onto its gains recorded against the Dollar, the Pound, and the Euro last week on the Open Forex Market (oanda.com) as it plunged by 0.85%, 0.68%, and 0.67% to open the week at GHC 6.1924, GHC 8.1844, and GHC 6.9785 from last week’s opening trade figures of GHC 6.1400, GHC 8.1291, and GHC 6.9319 respectively. The Cedi slid against the Euro despite concerns that resurgent coronavirus infections in the Eurozone may trigger fresh restrictions, derailing economic recovery gains made.

According to the BoG inter-bank rates, the Ghana Cedi began the year at GHC 5.7631 [January 4, 2021] against the US Dollar and is currently quoted at GHC 5.9568 [December 20th] indicating a 3.36% year-to-date (ytd) depreciation. Similarly, on the Open Forex Market (oanda.com), the Ghana Cedi traded at GHC 5.8885 [January 4, 2021] and is currently trading at GHC 6.1924 [December 20th], representing a 5.16% ytd depreciation against the US Dollar.