Currency News [March 8, 2022]

The Ghana Cedi advanced its losing streak against its major international trading partner currencies as currency speculations coupled with a strong demand for forex amid limited supply continue to hurt the local unit. Ghana’s Gross International Reserves which stood at USD 9.9 billion (providing 4.5 months of import cover) as of January is having a minimal impact on the local currency which has mainly been vulnerable to international developments.

The ongoing Russian-Ukrainian war has prompted investors to flee from riskier assets to safe havens with most sub-Saharan African countries being the largest hit. Reports indicate that yields on Ghana’s Eurobonds have risen to a 10-year high as offshore investors dump the country’s bonds. Offshore investors’ holdings in domestic assets have also taken a dip as holdings by foreigners in domestic assets declined in January this year as compared to same period last year.

On the Bank of Ghana (BoG) inter-bank trading platform, the Cedi plunged by 6.21%, 3.97%, and 2.99% to open the first trading day of the week at GHS 7.0135, GHS 9.2136, and GHS 7.6354 from last week’s opening quotes of GHS 6.6037, GHS 8.8615, and GHS 7.4136 against the Dollar, the Pound, and the Euro respectively. The Dollar remained resilient against most of its peers supported by safe-haven flows and as the much anticipated first Fed rate hike in March approaches.

On the Open Forex Market (oanda.com), the Cedi weakened by 4.11%, 2.36%, and 1.09% to open the week trading at GHS 7.0924, GHS 9.3373, and GHS 7.7087 from last week’s opening trade values of GHS 6.8125, GHS 9.1221, and GHS 7.6256 against the Dollar, the Pound, and the Euro respectively. The Euro posted a slight gain against the Cedi as growth in the Eurozone is projected to slow down on the back of the Ukraine conflict with sanctions on Russia expected to rather hurt the bloc’s energy needs.

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 7.0135 indicating a year-to-date (YTD) loss of 16.71% on the BoG inter-bank trading platform. It is also presently being quoted at GHS 7.0924 on the Open Forex Market (oanda.com) after opening the year at GHS 6.2112 indicating a YTD depreciation of 14.19%.