Currency News [August 22, 2022]

Following an emergency Monetary Policy Committee meeting last week that saw the central bank take a hard stance against a stubbornly high inflationary trend, the local currency pared some of its losses against the Pound and the Euro on the Bank of Ghana (BoG) inter-bank trading platform. The Cedi, however, stayed on its freefall path against the Dollar as investors fled from riskier assets amid growing fears that rate hikes in the advanced economies would weaken the world economy.

At the end of its emergency meeting, the central bank announced a historic 300 basis-point hike in the policy rate aimed at tackling the red-hot inflation prints. The bank also announced measures to stabilize the Cedi. It noted that it was working collaboratively with mining firms, international oil companies, and their bankers to purchase all forex arising from the voluntary repatriation of export proceeds from mining and oil & gas firms. This, the BoG believes would strengthen its forex auctions.

On the BoG inter-bank trading platform, the Cedi was down by 1.57% against the Dollar having opened the week trading at GHS 8.1982 from last week’s opening quote of GHS 8.0711. Against the Pound and the Euro, the Cedi recorded its first weekly gain in six weeks, coming in with a gain of 1.11% and 0.81% after opening the week with trade values of GHS 9.6386 and GHS 8.1476 from last week’s opening quotes of GHS 9.7467 and GHS 8.2140 respectively. The single currency fell against a host of currencies including the Cedi as a halt in Europe’s gas supply amid a difficult winter began to bite.

On the Open Forex Market (oanda.com), the Cedi plummeted by 7.91%, 5.30%, and 5.62% to trade at GHS 9.8521, GHS 11.6213, and GHS 9.8407 at the start of the week from last week’s opening trade values of GHS 9.1296, GHS 11.0361, and GHS 9.3172 against the Dollar, the Pound, and the Euro respectively. The greenback extended its gains against the Cedi on the back of safe-haven bets and on growing expectations of further aggressive US Fed interest rate hikes.

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 8.1982 indicating a year-to-date (YTD) loss of 36.43% on the BoG inter-bank trading platform. It is also presently being quoted at GHS 9.8521 on the Open Forex Market (oanda.com) after opening the year at GHS 6.2112 indicating a YTD loss of 58.62%.