Currency News for January 17, 2022

The Cedi’s weaknesses elevated further this week as it nursed losses against its three major trading partner currencies on the Open Forex Market (oanda.com). The Cedi’s performance this week comes after international rating agency, Fitch, downgraded Ghana’s Long-Term Foreign-Currency Issuer Default Rating (IDR) to B- with a negative outlook. This, Fitch asserts reflects Ghana’s loss of access to international capital markets in second half of 2021, following a pandemic-related surge in government debt.

Analysts believe that the downgrade will have a dire consequence on the local economy as government is likely to borrow at a higher cost from the international market or risks low subscription to its bond programme. Ghana’s international reserves are also likely to wane if offshore investors decide to exit the local market on fears of escalating debt levels, putting a strain on the local unit.

On the Bank of Ghana (BoG) inter-bank trading platform, the Cedi was little changed against the Dollar as it moved from GHS 6.0094 quoted last week to GHS 6.0093 this week. Against the Pound and the Euro, the Cedi was down by 0.64% and 0.75%, being quoted at GHS 8.2027 and GHS 6.8533 at the start of the week from last week’s opening trade figures of GHS 8.1506 and GHS 6.8023 respectively. News of a potential leadership change in the UK as Prime Minister Johnson faces the gravest crisis of his premiership did little to send the Pound south as investors focused on the possibility of another rate hike in February.

On the Open Forex Market (oanda.com), the Cedi plunged by 0.87%, 1.50%, and 1.61% to begin the week quoted at GHS 6.2721, GHS 8.5698, and GHS 7.1583 from last week’s opening trade values of GHS 6.2178, GHS 8.4429, and GHS 7.0447. The Dollar added to its earlier gains against the Cedi, pushed higher as concerns over inflation sent US Treasury yields soaring higher, increasing the greenback’s appeal.

The Cedi was quoted at GHC 6.0091 on the first official trading day of the year against the Dollar and is currently being sold at GHS 6.0093 indicating a year-to-date (ytd) loss of 0.001% on the BoG inter-bank trading platform. It is presently being quoted at GHS 6.2721 on the Open Forex Market (oanda.com) after opening the year at GHS 6.2112 indicating a ytd depreciation of 0.98%.