Currency News for January 31, 2022

A quicker pace of rate hikes in Ghana’s trading partner countries from their ultra-low levels continue to hurt the Cedi as the local unit opened the week extending its losses against the Dollar. The Cedi’s performance this week comes after the Monetary Policy Committee (MPC) kept the prime rate unchanged at 14.5% citing heightened underlying inflation pressures.

A document released by the MPC after the conclusion of its first policy meeting in 2022 put Ghana’s Gross International Reserves at USD 9.7 billion (equivalent to 4.4 months of import cover) as of December 2021 which compares favourably with last year’s closing balance of USD 8.6 billion (4.0 months of import cover). Ghana is also seeking to add a little over USD 168.9 million to its forex reserves through a tap issue of a 5-year USD denominated bond later this week, the proceeds of which are expected to shore up the supply of forex to sustain the Cedi.

On the Bank of Ghana (BoG) inter-bank trading platform, the Cedi was down by 0.21% and 0.08% after it opened the week trading at GHS 6.0266 and GHS 8.0925 from last week’s opening quotes of GHS 6.0139 and GHS 8.0863 against the Dollar and the Pound respectively. The Pound found support after last week’s loss against the Cedi as expectations of a second rate hike in less than 2 months boosted the Pound’s appeal. The Cedi was however up against the Euro by 0.57% after it began the week quoted at GHS 6.7539 from last week’s opening trade figure of GHS 6.7929.

On the Open Forex Market (oanda.com), the Cedi weakened by 0.48% to trade at GHS 6.3432 at the start of the week from last week’s open trade value of GHS 6.3131. The Dollar rallied against most of its peers following a more hawkish tone struck by the US Feb about the pace of rate hikes with at least four rate hikes expected in 2022. Against the Pound and the Euro, the Cedi appreciated by 0.11% and 0.72%, being quoted at GHS 8.5194 and GHS 7.0968 at the start of the week from last week’s quotes of GHS 8.5289 and GHS 7.1479 respectively.

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 6.0266 indicating a year-to-date (ytd) loss of 0.29% on the BoG inter-bank trading platform. It is also presently being quoted at GHS 6.3432 on the Open Forex Market (oanda.com) after opening the year at GHS 6.2112 indicating a ytd depreciation of 2.21%.