Currency News [May 23, 2022]

The Ghana Cedi fell flat across the board at this week’s open against its three major trading partner currencies after briefly recovering some of its losses suffered in the first three months of the year. The Cedi’s performance came after a highly anticipated monetary policy rate hike following a sharp rise in the consumer price index. In line with expectation, the central bank handed down a 200 basis points (bps) rate hike citing the need to decisively address the current inflationary pressures to re-anchor expectations and help foster macroeconomic stability.

Last week’s sale of forex forward rates as well as offshores participation in the government’s recently issued papers did little to lift the Cedi against its peers as interventions announced by the government to revamp the economy and boost the Cedi wanes off. Summary of macroeconomic and financial data report released by the Bank of Ghana (BoG) has revealed that Ghana’s Gross Interventional Reserves have been on a declining trajectory from the December last year when it peaked at USD 9.7 billion to close April at USD 8.3 billion, laying key restraints on the ability of the bank to continue its aggressive support to the local currency.

On the BoG inter-bank trading platform, the Cedi tumbled by 0.18%, 2.71%, and 2.63% to open the week trading at GHS 7.1369, GHS 8.9746, and GHS 7.6179 from last week’s opening trade figures of GHS 7.1239, GHS 8.7381, and GHS 7.4228 against the Dollar, the Pound, and the Euro respectively. The Euro came in stronger against the Cedi after the European Central Bank signaled its intention to lift the bloc’s rates after nearly a decade of negative interest rates.

On the Open Forex Market (oanda.com), the Cedi plunged by 1.97%, 4.44%, and 4.20% to begin the week quoted at GHS 7.8290, GHS 9.8381, and GHS 8.3356 from last week’s opening quotes of GHS 7.6780, GHS 9.4198, and GHS 7.9997 against the Dollar, the Pound, and the Euro respectively. The Dollar traded higher against the Cedi buoyed by a flight to safety by investors following concerns about the likelihood of a recession and the impact of elevated inflation.

The Cedi was quoted at GHC 6.0091 on the first trading day of the year against the Dollar and is currently being sold at GHS 7.1369 indicating a year-to-date (YTD) loss of 18.77% on the BoG inter-bank trading platform. It is also presently being quoted at GHS 7.8290 on the Open Forex Market (oanda.com) after opening the year at GHS 6.2112 indicating a YTD loss of 26.05%.