Currency News [May 9, 2022]

In a week that saw the Ghanaian government issue five separate papers spanning from short to medium-terms, the Cedi opened the week holding onto its current momentum as it extended its gains against its major trading partner currencies. The recent hikes in Treasury yields failed to entice investors to the government’s papers as offshores remain wary of domestic risks whilst the central bank’s contractionary policies sap up excess liquidity from the financial system.

The Cedi, however, remained steady at this week’s open, recording gains against the Dollar and the Pound. The local currency has remained firm in recent times buoyed by improved forex liquidity. The latest Bank of Ghana (BoG) forex forward rates auction result has revealed that demand for the Dollar is experiencing a decline after intense demand in the first three months of the year. Records at the Central Securities Depository also reveal that offshore holdings in local debt securities have witnessed an increase between January and April.

On the BoG inter-bank trading platform, the Cedi moved up marginally from GHS 7.1169 at last week’s open to begin this week at GHS 7.1167. The Cedi barely held the Dollar after strong jobs data in the US cemented expectations for more rate hikes. Against the Pound, the Cedi moved up by 1.00% to open the week at GHS 8.8090 from GHS 8.8982 at last week’s open. The Cedi lost traction against the Euro as it posted its first weekly loss in five weeks from GHS 7.5084 at last week’s open to GHS 7.5361 at this week’s open.

On the Open Forex Market (oanda.com), the Cedi traded higher by 0.19%, 1.92%, and 0.02% after it opened the week trading at GHS 7.6039, GHS 9.3683, and GHS 8.0131 from last week’s opening quotes of GHS 6.6185, GHS 9.5512, and GHS 8.0145 against the Dollar, the Pound, and the Euro respectively. News that the Bank of England (BoE) had hiked UK rates to 1%, the highest since 2009, did little to increase the Pound’s appeal as investors focused on a BoE warning that the UK could face a recession before the year ends.

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 7.1167 indicating a year-to-date (YTD) loss of 18.43% on the BoG inter-bank trading platform. It is also presently being quoted at GHS 7.6039 on the Open Forex Market (oanda.com) after opening the year at GHS 6.2112 indicating a YTD loss of 22.42%.