Currency News [June 20, 2022]

The ongoing tight Cedi funding challenges weighed on the Cedi as the local currency began the week nursing losses against its three major trading partner currencies on the Bank of Ghana (BoG) inter-bank trading platform. Offshore investors have in recent times been seen dumping domestic assets for safe-havens as rates elsewhere pick up steadily amidst a worsening domestic development characterized by surging inflation and a currency on a free fall.

A record of investors’ holdings in domestic securities has revealed a sharp decline in assets held by offshores between April and May, 2022. Offshores investors’ holdings in domestic debt securities declined to GHS 31.75 billion in May from GHS 32.11 billion in April whilst activities of foreign investors accounted for 61% of equity market transactions in May after declining from 74% in April. A BoG auction results of forex forward rates further affirmed a strong demand for Dollars as demand came in at 3.45 times the target amount at the mid-June auction compared to 3.23 times the bid cover ratio during the mid-May auction.

On the BoG inter-bank trading platform, the Cedi was down by 0.08%, 0.76%, and 1.04% to trade at GHS 7.2096, GHS 8.8274, and GHS 7.5909 at the start of the week from last week’s opening quotes of GHS 7.2036, GHS 8.7610 and GHS 7.5124 against the Dollar, the Pound, and the Euro respectively. The Dollar and the Pound were up against the Cedi after the rates in the two regions were hiked with the US Federal Reserve handing down its biggest rate increase since 1994.

On the Open Forex Market (oanda.com), the Cedi was up by 0.32% and 0.01% against the Dollar and the Pound, trading at GHS 7.9858 and GHS 9.7772 at the week’s open from last week’s opening quotes of GHS 8.0117 and GHS 9.7786 respectively. Against the Euro, the Cedi weakened by 0.28% to trade at GHS 8.4003 at the start of the week from last week’s opening trade figure of GHS 8.3767. The Euro rose against the Cedi to recover from last week’s losses, drawing support from the European Central Bank’s plans to raise the bloc’s interest rates to tame 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 7.2096 indicating a year-to-date (YTD) loss of 19.98% on the BoG inter-bank trading platform. It is also presently being quoted at GHS 7.9858 on the Open Forex Market (oanda.com) after opening the year at GHS 6.2112 indicating a YTD loss of 28.57%.