Currency News [May 22, 2023]

Investors renewed their confidence in the Ghanaian economy after the International Monetary Fund (IMF) last week approved a 3-year USD 3.0 billion Extended Credit Facility to help the country navigate out of its recent macroeconomic woes. Consequently, news of Ghana reaching an agreement with the IMF boosted the Cedi’s appeal as the local currency mounted strong gains to recoup some of its earlier losses posted against some of its trading pairs.

The announcement of the deal was followed by an immediate disbursement of the first tranche of USD 600.0 million which according to the governor of the central bank has come in to improve the country’s fast-deteriorating forex reserve. Ghana’s Gross International Reserves accordingly stood at USD 5.7 billion last week, up from a low of USD 5.1 billion as of March 2023. The Cedi’s performance also comes amidst a policy rate stay on the back of declines in the inflation readings and as the central bank agreed to a zero financing to the budget. It is expected that the Cedi will stay on a stable trajectory under the IMF-supported programme.

On the Bank of Ghana (BoG) inter-bank trading platform, the Cedi traded higher by 1.60%, 2.37%, and 2.25% from last week’s opening trade values of GHS 10.9690, GHS 13.7343, and GHS 11.9273 to open this week trading at GHS 10.7932, GHS 13.4084, and GHS 11.6585 against the Dollar, the Pound, and the Euro respectively. The Dollar traded modestly against most peers as the impasse between US lawmakers over debt ceiling negotiations kept investors on edge.

On the Open Forex Market (oanda.com), the Cedi strengthened by 7.65%, 8.05%, and 8.12% to begin the week trading at GHS 10.8484, GHS 13.5002, and GHS 11.7339 from last week’s opening trade quotes of GHS 11.7474, GHS 14.6828, and GHS 12.7703 against the Dollar, the Pound, and the Euro respectively. The Pound weakened against some peers after data revealed weaknesses in the UK’s manufacturing sector, casting doubts over the ability of the central bank to keep hiking rates.

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 10.7932 indicating a year-to-date (YTD) loss of 25.64% on the BoG inter-bank trading platform. It is also presently being quoted at GHS 10.8484 on the Open Forex Market (oanda.com) after opening the year at GHS 10.0825 indicating a YTD loss of 7.60%.