Currency News [January 16, 2023]

The Ghana Cedi came under intense pressure against its three major trading partner currencies at the start of the week, adding onto weaknesses seen last week where the Cedi showed signs of loss of traction after making positive moves against some of its trading pairs at the close of last year. The Cedi’s performance this week comes as the government struggles to begin its domestic debt restructuring program after agitations from different groups against the absence of public engagements led to another extension of the deadline for subscribing to the debt exchange program.

Appearing before the Public Accounts Committee of Parliament, the Bank of Ghana (BoG) governor, attributed the recent fast depreciation of the Cedi to the pressure on the Ghanaian economy as demand for forex by offshores and importers heightens. The Governor, however, remained optimistic that the government’s gold-for-oil policy will help reduce the current pressures on Ghana’s forex reserves.

On the BoG inter-bank trading platform, the Cedi lost by 14.72%, 15.23%, and 15.73% to begin the week trading at GHS 10.3409, GHS 12.6159, and GHS 11.1892 from last week’s opening trade quotes of GHS 9.0142, GHS 10.9487, and GHS 9.6685 against the Dollar, the Pound, and the Euro respectively. The Pound rose against the Cedi, sending its year-to-date gains to 22.17% as better-than-expected wage growth, employment and gross domestic product figures from the UK boosted the Pound’s appeal.

On the Open Forex Market (oanda.com), the Cedi traded down by 15.16%, 15.71%, and 16.53% from GHS 10.2862, GHS 12.5087, and GHS 11.0108 at last week’s open to begin this week trading at GHS 11.8451, GHS 14.4743, and GHS 12.8307 against the Dollar, the Pound, and the Euro respectively. The Euro came in strong against a set of currencies including the Cedi on growing expectations that the European Central Bank will continue to hike the bloc’s interest rates at a time when the US Fed is expected to slow the pace of its interest-rate hikes.

The Cedi was quoted at GHC 8.5903 on the first trading day of the year against the Dollar and is currently being sold at GHS 10.3409 indicating a YTD loss of 20.38% on the BoG inter-bank trading platform. It is also presently being quoted at GHS 11.8451 on the Open Forex Market (oanda.com) after opening the year at GHS 10.0825 indicating a YTD loss of 17.48%.