Currency News [July 25, 2022]

The Cedi’s abysmal performance in the first half of the year has been widely attributed to the monetary policy normalization in the advanced economies, the downgrade of government credit ratings, and seasonal demand pressures from body corporates. This is the assertion made by the government after the finance minister presented the mid-year budget review to parliament. These constraints, according to the finance minister, levelled off gains made from inflows from the mining sector and remittances, pushing the Cedi to hit record lows against its majors.

The Cedi this week remained pressured, extending its losses 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 Cedi’s performance comes after a slowdown in the latest inflation reading pushed Ghana’s central bank to keep its benchmark rate unchanged at 19.0%. Backing its decision to stall the policy rate, the central bank noted that it expects that the macroeconomic framework that will underpin an agreed IMF-supported program will present a stronger coordinated monetary and fiscal policy framework which will anchor price stability.

On the BoG inter-bank trading platform, the Cedi depreciated by 1.56%, 1.97%, and 2.06% to open the week trading at GHS 7.5038, GHS 9.0338, and GHS 7.6629 from last week’s opening quotes of GHS 7.3882, GHS 8.8592, and GHS 7.5084 against the Dollar, the Pound, and the Euro respectively. The Dollar rose against the Cedi for the eleventh consecutive time this week on growing expectations that the US Fed will hike interest rates by another 0.75% later this week.

On the Open Forex Market (oanda.com), the Cedi plummeted by 1.09%, 1.79%, and 1.91% to trade at GHS 8.2219, GHS 9.8892, and GHS 8.4013 at the week’s open from last week’s opening trade values of GHS 8.1329, GHS 9.7157, and GHS 8.2439 against the Dollar, the Pound, and the Euro respectively. The Euro came in with strong gains against the Cedi after the European Central Bank hiked interest rates more than expected by 0.50% last week, its first since 2011.

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 7.5038 indicating a year-to-date (YTD) loss of 24.87% on the BoG inter-bank trading platform. It is also presently being quoted at GHS 8.2219 on the Open Forex Market (oanda.com) after opening the year at GHS 6.2112 indicating a YTD loss of 32.37%.