Currency News [October 3, 2022]

The Ghana Cedi fell flat across the board against its three major trading partner currencies at the week’s open after briefly paring some of its losses against the Pound and the Euro on the Open Forex Market (oanda.com). The Cedi resumed its free fall against its majors, sustaining significant losses amidst fears of a probable debt restructuring on looming signs that Ghana’s debt levels may be reaching an alarmingly high level.

The local unit’s performance at the week’s open comes after rating agency, Moody’s downgraded Ghana’s long-term issuer and senior unsecured debt ratings from Caa1 to Caa2, days after a similar downgrade by Fitch Ratings. The downgrades have come in to worsen Ghana’s already tight financing conditions as the nation continues its talks with the IMF to access a USD 3.0 billion bailout from the IMF. Ongoing talks with the IMF are expected to be concluded this week with analysts and market watchers on the lookout for how Ghana will navigate through the storm to secure a deal.

On the Bank of Ghana (BoG) inter-bank trading platform, the Cedi traded lower by 0.87%, 6.98%, and 3.07% to begin the week at GHS 9.6296, GHS 10.8998, and GHS 9.4641 from last week’s opening quotes of GHS 9.5461, GHS 10.1885, and GHS 9.1822 against the Dollar, the Pound, and the Euro respectively. The Pound reversed its last week’s 0.89% loss against the Cedi after the UK government made a quick U-turn on the proposed scrapping of the highest rate of income tax.

On the Open Forex Market (oanda.com), the Cedi edged down by 2.19%, 7.36%, and 3.93% to trade at GHS 10.4839, GHS 11.7723, and GHS 10.2796 at the week’s open from last week’s opening trade values of GHS 10.2595, GHS 10.9657, and GHS 9.8907 against the Dollar, the Pound, and the Euro respectively. The Euro ended two counts of weekly losses against the Cedi on growing expectations of another hefty rate hike after data showed that inflation in the Eurozone beat forecast, climbing to a record high of 10.0% in September.

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 9.6296 indicating a year-to-date (YTD) loss of 60.25% on the BoG inter-bank trading platform. It is also presently being quoted at GHS 10.4839 on the Open Forex Market (oanda.com) after opening the year at GHS 6.2112 indicating a YTD loss of 68.79%.