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Currency News [May 2, 2023]

The Cedi lost steam at the week’s open as it extended its earlier losses against its major trading partner currencies on the Bank of Ghana (BoG) inter-bank trading platform and the Open Forex Market (oanda.com). The Cedi has failed to hold onto gains seen in the early part of last month where the Cedi’s performance was widely supported by progress made by Ghana in its debt restructuring negotiations with bilateral lenders ahead of an International Monetary Fund (IMF) Executive Board level approval of a USD 3.0 billion bailout package.

The local currency has however come under renewed pressure following the absence of clear timelines as to when Ghana is likely to reach an agreement with the IMF. A recent downgrade of Ghana’s Long-Term Local-Currency Issuer Default Rating of some domestic bonds to Restrictive Default coupled with the steady decline in the nation’s reserve continues to worsen the Cedi’s outlook. We foresee a further troubled Cedi outlook until such a time when Ghana has been able to secure the IMF bailout package.

On the BoG inter-bank trading platform, the Cedi traded lower by 0.02%, 0.65%, and 0.23% to open the week at trade values of GHS 10.9571, GHS 13.6733, and GHS 12.0534 from last week’s opening trading values of GHS 10.9546, GHS 13.5848, and GHS 12.0262 against the Dollar, the Pound, and the Euro respectively. The Dollar rose against a basket of currencies as weaker-than-expected US economic growth numbers in the first quarter was viewed as not likely to alter this week’s rate hike.

On the Open Forex Market (oanda.com), the Cedi plummeted by 0.34%, 0.91%, and 0.16% from GHS 11.7990, GHS 14.6962, and GHS 12.9958 at last week’s open to trade at GHS 11.8393, GHS 14.8293, and 13.0160 at this week’s open. A widely anticipated 50 basis points European Central Bank rate hike later this week supported the single currency’s gains against some peers.

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 10.9571 indicating a year-to-date (YTD) loss of 27.55% on the BoG inter-bank trading platform. It is also presently being quoted at GHS 11.8393 on the Open Forex Market (oanda.com) after opening the year at GHS 10.0825 indicating a YTD loss of 17.42%.

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