Currency News [May 8, 2023]

The Ghana Cedi retreated yet again against its three major trading partner currencies at this week’s open on looming signs of huge corporate demand for forex as businesses prep for their Annual General Meetings. The local currency after a brief reprieve, has failed to hold onto gains as demand for forex due to high import costs, capital flights, diminishing investor sentiment, and profit repatriation by multinationals add to the Cedi’s struggles. This comes amidst increased intervention by the central bank in both the spot and forward markets.

Despite the Cedi’s renewed difficulties, it is expected to end the year better than last year. Fitch Solution in a report has predicted that the Cedi will be expected to stay on a stable trajectory through to the end of the year after Ghana reaches an agreement with the IMF. Fitch noted that “while short-term exchange rate volatility will persist, we believe that the cedi will stabilize once a formal creditors’ committee is formed and the IMF board approves Ghana’s programme”

On the Bank of Ghana (BoG) inter-bank trading platform, the Cedi traded lower by 0.03%, 1.31%, and 0.26% from GHS 10.9571, GHS 13.6733, and GHS 12.0534 at last week’s opening to begin this week at trade values of GHS 10.9603, GHS 13.8527, and GHS 12.0847 against the Dollar, the Pound, and the Euro respectively. The Pound gained against more peers following last week’s 25 basis points rate hike as the Bank of England revamped efforts to combat inflation still running at double digits.

On the Open Forex Market (oanda.com), the Cedi depreciated by 0.23%, 1.14%, and 0.54% to open this week trading at GHS 11.8671, GHS 14.9982, and GHS 13.0868 from last week’s open trade values of GHS 11.8393, GHS 14.8293, and GHS 13.0160 against the Dollar, the Pound, and the Euro respectively. The Euro rose against a basket of currencies supported by expectations that the European Central Bank will keep interest rates high than its peers after it signalled more tightening after last week’s policy sitting.

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 10.9603 indicating a year-to-date (YTD) loss of 27.59% on the BoG inter-bank trading platform. It is also presently being quoted at GHS 11.8671 on the Open Forex Market (oanda.com) after opening the year at GHS 10.0825 indicating a YTD loss of 17.70%.