Currency News [January 23, 2023]

News that Ghana was opting for debt relief under the Group of 20 Common Framework did little to strengthen the Cedi’s performance against its major trading partner currencies as the market rather chose to focus on Ghana’s inability to make a coupon payment on a Eurobond paper last week. The Cedi thus fell against the Dollar, the Pound, and the Euro on both the Bank of Ghana (BoG) inter-bank trading platform and the Open Forex Market (oanda.com), albeit at a slower pace compared to levels seen last week.

Ghana failed to make a coupon payment on a January 2026 Eurobond following the sovereign’s suspension of interest payments on some USD 13.0 billion owed to external creditors. This development culminated in a downgrade of the note to selective default by rating agency, S&P, further worsening the already dampened investor confidence. Ghana is exploring several options including a swap for local securities, a suspension of payments on Eurobonds and negotiations under the G20 Common Framework in a bid to qualify for a USD 3.0 billion IMF bailout.

On the BoG inter-bank trading platform, the Cedi traded down by 0.62%, 1.96%, and 1.04% to begin the week trading at GHS 10.4052, GHS 12.8629, and GHS 11.3051 from last week’s opening trade quotes of GHS 10.3409, GHS 12.6159, and GHS 11.1892 against the Dollar, the Pound, and the Euro respectively. The Pound gained against the local unit to extend its year-to-date (YTD) gains to 24.56% on the heels of data which showed that the UK economy performed better than feared, driving expectations of more interest rate hikes.

On the Open Forex Market (oanda.com), the Cedi lowered by 4.51%, 5.97%, and 4.98% from GHS 11.8451, GHS 14.4743, and GHS 12.8307 posted at the start of last week to open this week trading at GHS 12.3790, GHS 15.3391, and GHS 13.4698 against the Dollar, the Pound, and the Euro respectively. The Euro added to its gains against the Cedi on growing expectations that the European Central Bank will keep raising interest rates quickly to slow inflation.

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 10.4052 indicating a YTD loss of 21.13% on the BoG inter-bank trading platform. It is also presently being quoted at GHS 12.3790 on the Open Forex Market (oanda.com) after opening the year at GHS 10.0825 indicating a YTD loss of 22.78%.