Currency News [May 4, 2022]

The Ghana Cedi opened the holiday-thinned week registering a mixed performance against its three major trading partner currencies on both the Bank of Ghana (BoG) inter-bank trading platform and the Open Forex Market (oanda.com). The local unit maintained its resilience recording gains against the Pound and the Euro as forex liquidity gradually improves amid a slowdown in Dollar demand.

Results of the BoG’s forex forward rates auctions have shown that demand for the greenback continues to decline with the bid cover ratio dropping from a high of 3.85x in early April to 3.21x in early May. Gains in the Cedi are however expected to be capped by slow participation in domestic bonds by offshore investors as rates pick up steadily in the US, UK and other areas. The past few weeks have seen government bills largely undersubscribed despite a climb in the yields.

On the BoG inter-bank trading platform, the Cedi was little changed against the Dollar as it traded at GHS 7.1169 on the first official trading day of the week, from GHS 7.1159 recorded at last week’s open. A 50 basis point upward adjustment in the US policy rate boosted the Dollar’s appeal as it climbed up against most of its peers. Against the Pound and the Euro, the Cedi was up by 1.67% and 1.46% to begin the week at GHS 8.8982 and GHS 7.5084 from last week’s opening quotes of GHS 9.0492 and GHS 7.6198 respectively.

On the Open Forex Market (oanda.com), the Cedi tumbled by 0.34% to trade at GHS 7.6185 at the week’s open from last week’s opening trade value of GHS 7.5929 against the Dollar. Against the Pound and the Euro, the Cedi extended its gains by 1.38% and 1.74%, trading at GHS 9.4736 and GHS 7.9795 at the start of the week from last week’s opening trade values of GHS 9.6845 and 8.1549 respectively. The Euro continued to be hurt by concerns about Europe’s energy security, inflation, and economic growth due to the ongoing war in Ukraine.

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 7.1169 indicating a year-to-date (YTD) loss of 18.44% on the BoG inter-bank trading platform. It is also presently being quoted at GHS 7.6185 on the Open Forex Market (oanda.com) after opening the year at GHS 6.2112 indicating a YTD loss of 22.66%.