Currency News [May 29, 2023]

There was renewed pressure on the local currency after the Cedi opened the week erasing portions of recent gains against its three major trading partner currencies. The positive sentiments that surrounded Ghana securing an International Monetary Fund (IMF) bailout programme this month had propelled the Cedi to make big moves against most of its trading partner currencies where it was labeled as the best-performing currency among a group of currencies tracked by Bloomberg in May.

The local unit, however, failed to cling to its bullish run mainly on the back of mixed local and international developments. On the international front, growing expectations of a further policy rate tightening in the US despite earlier hints of a pause boosted the Dollar’s appeal. Concerns over a potential U.S. default similarly pushed investors to swam to safe havens at the expense of riskier assets and emerging market currencies. Internally, strong corporate demand for forex as businesses prep for dividends payments contributed to the Cedi’s reversed gains.

On the Bank of Ghana (BoG) inter-bank trading platform, the Cedi traded lower by 1.74%, 1.01%, and 0.87% to trade at GHS 10.9810, GHS 13.5440, and GHS 11.7600 at the week’s open from last week’s trade values of GHS 10.7932, GHS 13.4084, and GHS 11.6585 against the Dollar, the Pound, and the Euro respectively. The Euro rose against a number of emerging market currencies as expectations of extended policy hikes in the Eurozone overshadowed the bloc’s largest economy, Germany, officially slipping into a recession.

On the Open Forex Market (oanda.com), the Cedi weakened by 3.51%, 2.75%, and 2.59% from last week’s opening trade quotes of GHS 10.8484, 13.5002, and GHS 11.7339 to open this week at trade values of GHS 11.2292, GHS 13.8714, and GHS 12.0375 against the Dollar, the Pound, and the Euro respectively. The Pound gained against the Cedi following better-than-expected UK retail sales data which further cemented additional rate hikes to tame record inflation levels.

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 10.9810 indicating a year-to-date (YTD) loss of 27.83% on the BoG inter-bank trading platform. It is also presently being quoted at GHS 11.2292 on the Open Forex Market (oanda.com) after opening the year at GHS 10.0825 indicating a YTD loss of 11.37%.