Currency News [December 18, 2023]

Delays in realizing the expected forex inflows from the International Monetary Fund (IMF) and proceeds from the cocoa syndicated loan facility continued to mount growing pressures on the local unit amidst a surge in the demand for forex as the Cedi opened the week nursing losses across the board against it three major trading partner currencies on both the Bank of Ghana (BoG) inter-bank trading platform and the Open Forex Market (oanda.com).

According to media reports, the failure of some bilateral partners to agree to the proposed slashing of Ghana’s debt owed to external creditors has added to the long wait for the disbursement of the second tranche under the IMF’s Extended Credit Facility (ECF) programme. This coupled with difficulties limiting Ghana’s COCOBOD from reaching an agreement with a consortium of international banks for a loan facility to support cocoa beans purchases for the 2023/2024 crop season has put a huge constrain on the capability of the central bank to intervene in local currency market, heaping pressures on the Cedi.

On the BoG inter-bank trading platform, the Cedi lost by 0.06%, 0.92%, and 1.47% to open the week trading at GHS 11.6489, GHS 14.7417, and GHS 12.7248 from last week’s opening trade figures of GHS 11.6416, GHS 14.6067, and GHS 12.5401 against the Dollar, the Pound, and the Euro respectively. The Pound recovered from last week’s losses against the Cedi as the prospect of interest rates remaining higher in the UK than in most other major economies next year offered some support to the British currency.

On the Open Forex Market (oanda.com), the Cedi similarly fell across the board with a depreciation of 0.35%, 1.25%, and 1.79% to begin the week trading at GHS 12.1009, GHS 15.3272, and GHS 13.2104 from last week’s opening trade quotes of GHS 12.0582, GHS 15.1405, and GHS 12.9784 against the Dollar, the Pound, and the Euro respectively. The Euro rose against a basket of currencies including the Cedi after the European Central Bank expressed their desire to keep policy tight well into the coming year to combat inflation.

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 11.6416 indicating a YTD loss of 35.61% on the BoG inter-bank trading platform. It is also presently being quoted at GHS 12.1009 on the Open Forex Market (oanda.com) after opening the year at GHS 10.0825 indicating a YTD loss of 20.02%.