Currency News [February 28, 2022]

The Cedi’s woes continued this week despite the central bank’s continuous intervention in the currency space. The local unit this week plunged to new record lows against its three major trading partner currencies as increased demand for forex outstrips supply. Pressures on the Cedi and other riskier African currencies have worsened, buoyed by geopolitical risks as Russia-Ukraine tensions continue to escalate.

In a move to ease the growing pressures on the Cedi, the government according to a report by the Ghana News Agency is seeking to implement several strategies to check the intense demand for forex. Against this backdrop, the Bank of Ghana (BoG) has instructed banks and brokers not to trade above the official rate. The government has also been advised to take a second look at profit and other income repatriation by foreign investors.  These measures will be aimed at slowing the drastic fall of the Cedi.

On the BoG inter-bank trading platform, the Cedi was down by 2.77%, 1.32%, and 1.77% after it opened the week trading at GHS 6.6037, GHS 8.8615, and GHS 7.4136 from last week’s opening quotes of GHS 6.4259, GHS 8.7457, and GHS 7.2844 against the Dollar, the Pound, and the Euro respectively. The Dollar soared against a host of currencies as sanctions on Russia lifted demand for the world’s reserve currency.

On the Open Forex Market (oanda.com), the Cedi plummeted by 3.24%, 1.54%, and 1.88% to open the week trading at GHS 6.8125, GHS 9.1221, and GHS 7.6256 from last week’s opening trade values of GHS 6.5989, GHS 8.9840, and GHS 4.4846 against the Dollar, the Pound, and the Euro respectively. Fears that Europe’s over-reliance on Russia for its energy needs could harm the bloc’s recovery had little impact on the Euro, as the single currency came in stronger against a basket of currencies including the Cedi.

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 6.6037 indicating a year-to-date (YTD) loss of 9.89% on the BoG inter-bank trading platform. It is also presently being quoted at GHS 6.8125 on the Open Forex Market (oanda.com) after opening the year at GHS 6.2112 indicating a YTD depreciation of 9.68%.