Currency News [October 9, 2023]

Optimism surrounding Ghana’s progress towards receiving the second tranche of the USD 600.0 million under the International Monetary Fund’s (IMF) Extended Credit Facility (ECF) failed to strengthen the Cedi as the local currency opened the week nursing losses across the board against its three major trading partner currencies. The Cedi together with other emerging market currencies as well as risky assets were at the receiving end of a flight to safe heavens as the escalation of the conflict in the Middle East hit risk sentiment pushing investors into safety.

Ghana and the IMF last week reached a staff-level agreement on economic policies and reforms after the conclusion of the first review of the sovereign’s three-year program with the Fund. The agreement after receiving the IMF’s Executive Board approval as well as the necessary financing assurances from the nation’s external creditors will see to the disbursement of the second tranche under the ECF programme which will further strengthen the Cedi at a time when demand for forex is rising steadily.

On the Bank of Ghana (BoG) inter-bank trading platform, the Cedi declined by 0.71%, 1.35%, and 1.13% to open the week at trade values of GHS 11.2343, GHS 13.7059, and GHS 11.8379 against the Dollar, the Pound, and the Euro haven weakened from GHS 11.1548, GHS 13.5240, and GHS 11.7061 respectively at last week’s open. The Dollar gained broadly against a basket of currencies following the release of stronger-than-expected payroll data as the data revealed that US employment increased by the most in the eight months in September.

On the Open Forex Market (oanda.com), the Cedi plunged by 1.12%, 1.60%, and 1.33% to open the week trading at GHS 11.7583, GHS 14.3556, and GHS 12.4074 from last week’s opening trade values of GHS 11.6286, GHS 14.1296, and GHS 12.2451 against the Dollar, the Pound, and the Euro respectively. The Euro rose to pare some of its recent losses against the Cedi buoyed by news that the bloc’s biggest economy, Germany, recorded strong industrial orders in August, climbing up by nearly 4.0%.

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 11.2343 indicating a YTD loss of 30.78% on the BoG inter-bank trading platform. It is also presently being quoted at GHS 11.7583 on the Open Forex Market (oanda.com) after opening the year at GHS 10.0825 indicating a YTD loss of 16.62%.