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Currency News [February 27, 2023]

The Cedi opened the week pressured against its three major trading partner currencies as Ghana’s quest to engage some of its external creditors for a probable restructuring of its bilateral debt faced a headwind, raising concerns about how quickly Ghana can secure the IMF board-level agreement to unlock a USD 3.0 billion bailout package. This follows an announcement by the finance minister last week that the government’s planned high-level meeting with Chinese creditors had been postponed to a month’s time.

The meeting forms a critical aspect of measures by a team of negotiators asking Ghana’s external creditors to allow for interest payment suspension to enable Ghanaian authorities to bring the public debt stock to sustainable levels. It is however expected that the recent upgrade of Ghana’s local currency sovereign credit ratings from ‘selective default’ to ‘CCC+/C’ by S&P Global Ratings would pare the diminishing investor confidence in domestic assets. Strong growth projections by S&P in 2023 and beyond should also help calm investor nervousness in the local economy.

On the Bank of Ghana (BoG) inter-bank trading platform, the Cedi lost by 1.94%, 1.96%, and 1.14% to begin the week trading at GHS 11.0185, GHS 13.2542, and GHS 11.6859 from last week’s opening trade quotes of GHS 10.8093, GHS 12.9993,  and GHS 11.5539 against the Dollar, the Pound, and the Euro respectively. The Dollar gained as stronger-than-expected data, including hot inflation prints, pointed to the US Fed raising interest rates further and keeping them higher for longer than originally anticipated.

On the Open Forex Market (oanda.com), the Cedi added to losses seen last week, dipping by 1.28%, 0.97%, and 0.22% to trade at GHS 12.9015, GHS 15.4792, and GHS 13.6423 at the week’s open from GHS 12.7383, GHS 15.3305, and GHS 13.6126 at last week’s open. The Pound traded higher against a host of currencies after British companies unexpectedly reported the first growth in seven months, helping calm down fears of an imminent recession.

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 11.0185 indicating a year-to-date (YTD) loss of 28.27% on the BoG inter-bank trading platform. It is also presently being quoted at GHS 12.9015 on the Open Forex Market (oanda.com) after opening the year at GHS 10.0825 indicating a YTD loss of 27.96%.

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