Currency News [October 24, 2022]

The Cedi submerged to fresh record lows against its three major trading partner currencies at the week’s open after sustaining huge losses last week on both the Bank of Ghana (BoG) inter-bank trading platform and on the Open Forex Market (oanda.com). The local unit has come under intense selling pressure on the back of heightened speculative demand for forex coupled with the selling of domestic assets owned by offshore investors. The strong demand for forex has also been driven by a rise in imports ahead of the festive season.

The Cedi’s freefall has consequently triggered a response by authorities.  A release from the information ministry has noted that the central bank is scheduled to meet with heads of commercial banks and the forex bureau association to hold discussions aimed at ensuring a more orderly and open access to forex on the market in a bid to curb the overpricing of forex. The Economic Management Team is also expected to meet to deliberate on measures to salvage the Cedi.

On the BoG inter-bank trading platform, the Cedi lost by 15.30%, 14.40%, and 15.83% to trade at GHS 12.5400, GHS 14.1739, and GHS 12.3941 at the week’s open from last week’s opening trade values of GHS 10.8763, GHS 12.3903, and GHS 10.7007 against the Dollar, the Pound, and the Euro respectively. The Pound Sterling added to its previous week’s gains against the Cedi supported by improved risk sentiment in the UK following the selection of a former finance minister as the new prime minister.

On the Open Forex Market (oanda.com), the Cedi posted bigger margins of decrease, depreciating by 22.70%, 22.68%, and 23.58%, to open the week trading at GHS 13.5238, GHS 15.2956, and GHS 13.3268 from last week’s opening quotes of GHS 11.0207, GHS 12.4681, and GHS 10.7842 against the Dollar, the Pound, and the Euro respectively. The Euro gained the most against the Cedi as markets await another rate hike by the European Central Bank later in the week.

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 12.5400 indicating a year-to-date (YTD) loss of 108.68% on the BoG inter-bank trading platform. It is also presently being quoted at GHS 13.5238 on the Open Forex Market (oanda.com) after opening the year at GHS 6.2112 indicating a YTD loss of 117.73%.