Currency News [July 12, 2022]

As fears of high inflation and slowing economic growth weigh on markets, investors continue to seek solace in the Dollar and other safe havens at the expense of emerging market currencies. The Cedi weakened to a fresh low against the Dollar on the first official trading day of the week as offshores continued to exit the domestic market for safety and higher earnings elsewhere.

Ghana’s recent decision to seek as much as USD 1.5 billion from the International Monetary Fund (IMF) to shore up its reserves and regain access to the international market did little to revive the Cedi as gains associated with the announcement quickly waned off as investors focused on the broader underlying risks facing the country. The central bank’s recent sale of forex forward rates this week showed that bids came in excess of four times the target amount, the highest bid cover ratio in the relatively young history of the bi-weekly Dollar rate auctions.

On the Bank of Ghana (BoG) inter-bank trading platform, the Cedi was down by 1.24% against the Dollar, trading at GHS 7.3282 on the first official trading day of the week from last week’s opening quote of GHS 7.2381. The Dollar extended its broad gains against a basket of currencies following June’s 0.75% rate hike and as global growth fears boosted the greenback’s appeal. Against the Pound and the Euro, the Cedi strengthened to build on last week’s gains, coming in with 0.57% and 2.30% gains this week after opening the week at GHS 8.7249 and GHS 7.3784 from last week’s opening quotes of GHS 8.7748 and GHS 7.5521 respectively.

On the Open Forex Market (oanda.com), the Cedi traded lower by 0.30% to open the week at GHS 8.0912 against the Dollar from last week’s opening figure of GHS 8.0669. It was up by 1.16% and 2.93% against the Pound and the Euro, having opened the week trading at GHS 9.6553 and GHS 8.1706 from last week’s opening quotes of GHS 9.7725 and GHS 8.4170 respectively. The Euro added to its losses against the Cedi as Europe remains vulnerable to concerns over a potential energy supply crunch if Russia further restricts the export of gas to the region.

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 7.3282 indicating a year-to-date (YTD) loss of 21.95% on the BoG inter-bank trading platform. It is also presently being quoted at GHS 8.0912 on the Open Forex Market (oanda.com) after opening the year at GHS 6.2112 indicating a YTD loss of 30.27%.