Currency News for August 29, 2022

The Cedi’s funding challenges continued unabated as offshores exit the domestic market to take advantage of improved yields in the advanced economies at a time when fears of the world economy sinking into recession rise and with inflation expected to remain elevated across emerging market economies. Results of the latest forex forward rates auction held last week revealed the prevalence of strong demand for forex by investors and traders with a total of USD 109.5 million bids submitted against a target amount of USD 25.0 million.

The Cedi fell across the board against its three major trading partner currencies, further extending its losses against the three on the Open Forex Market (oanda.com). The coming on board of a USD 750.0 million Afreximbank loan facility will be expected to give the local unit some respite, however, given the magnitude of the demand pressures, the Cedi will continue to remain pressured in short to medium-term. A USD 1.3 billion cocoa syndicated loan facility expected later in the year will also help to strengthen Ghana’s forex reserve position.

On the Bank of Ghana (BoG) inter-bank trading platform, the Cedi was down by 0.40% and 0.89% against the Dollar and the Euro after trading at GHS 8.2306 and GHS 8.2201 at the week’s open from last week’s opening trade values of GHS 8.1982 and GHS 8.1476 respectively. The Dollar was boosted by a firm commitment of the US Fed to raising interest rates to curb inflation. Against the Pound, the Cedi maintained a strong footing to add a 0.05% gain to its last week’s gain after opening the week trading at GHS 9.6339 from last week’s opening trade value of GHS 9.6386.

On the Open Forex Market (oanda.com), the Cedi traded down by 2.04%, 1.15%, and 1.87% to open the week at trading values of GHS 10.0527, GHS 11.7553, and GHS 10.0244 from last week’s opening quotes of GHS 9.8521, GHS 11.6213, and GHS 9.8407 against the Dollar, the Pound, and the Euro respectively. The single currencies rose against the Cedi on growing expectations of a super-sized European Central Bank policy tightening and lower energy prices.

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 8.2306 indicating a year-to-date (YTD) loss of 36.97% on the BoG inter-bank trading platform. It is also presently being quoted at GHS 10.0527 on the Open Forex Market (oanda.com) after opening the year at GHS 6.2112 indicating a YTD loss of 61.85%.