Currency News [October 17, 2022]

Cedi weakness worsened further at the week’s open as the local economy continued to grapple with hyperinflation, revenue underperformance, and offshore disinvestment of domestic assets among others. The Cedi opened the week weaker against its three major trading partner currencies, recording bigger margins of depreciation on the Bank of Ghana’s (BoG) inter-bank trading platform compared to figures recorded on the Open Forex Market (oanda.com).

The Cedi has come under renewed and intensified pressure at the start of the last quarter of the year, widely characterized by strong demand for forex by traders ahead of the festive season. The central bank’s latest auction of forex forward rates revealed that demand for the Dollar came in a little over four times the target amount of USD 25.0 million at a time that Ghana’s international reserves have tanked to a record low. A BoG publication at the conclusion of its monetary policy committee meeting has revealed that Ghana’s Gross International Reserves dwindled to USD 6.6 billion, equivalent to 2.9 months of import cover in September, down from USD 9.7 billion, equivalent to 4.3 months of import cover at the close of 2021.

On the BoG inter-bank trading platform, the Cedi traded down by 12.68%, 16.25%, and 14.35% to begin the week trading at GHS 10.8763, GHS 12.3903, and GHS 10.7007 from last week’s opening quotes of GHS 9.6523, GHS 10.6581, and GHS 9.3582 respectively against the Dollar, the Pound, and the Euro respectively. The Dollar soared against the Cedi after red-hot inflation data from the US cemented expectations that the Fed will continue its aggressive rate hikes.

On the Open Forex Market (oanda.com), the Cedi was down by 4.34%, 6.66%, and 5.10% to trade at GHS 11.0207, GHS 12.4681, and GHS 10.7842 at the week’s open from last week’s opening trade values of GHS 10.5627, GHS 11.6897, and GHS 10.2611 against the Dollar, the Pound, and the Euro respectively. The Pound recovered from last week’s loss against the Cedi as investor sentiment soared following UK’s row back of its ill-fated tax-slashing mini-budget which had roiled markets.

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 10.8763 indicating a year-to-date (YTD) loss of 81.00% on the BoG inter-bank trading platform. It is also presently being quoted at GHS 11.0207 on the Open Forex Market (oanda.com) after opening the year at GHS 6.2112 indicating a YTD loss of 77.43%.