Currency News [March 4, 2024]

The Cedi extended its free fall against its major trading partner currencies after the President in a State of the Nation address to parliament failed to list policies the government intends to implement to slow down the renewed pressures on the local currency. The President, however, recounted how the government’s Gold for Oil Programme has helped to significantly reduce forex pressures on the bulk energy supply chain. The President remained hopeful that the recent turnaround of some macroeconomic variables will spark investor optimism.

The Cedi’s performance at the week’s opening came largely on the back of the rising demand pressures on forex by investors, businesses, and importers. The recent interest payments on the government’s Domestic Debt Exchange Programme bonds have exacerbated the already pressured Cedi as offshore investors begin to repatriate their investment proceeds. The Cedi is expected to see further weaknesses despite the central bank’s continuous intervention as businesses prep for their annual general meetings.

On the Bank of Ghana (BoG) inter-bank trading platform, the Cedi depreciated by 0.90%, 0.99%, and 0.99% to begin the week at trade values of GHS 12.5082, GHS 15.8753, and GHS 13.5849 from last week’s opening trade values of GHS 12.3967, GHS 15.7202, and GHS 13.4511 against the Dollar, the Pound, and the Euro respectively. The Euro firmed against a basket of currencies unperturbed by inflation data which dipped last month but underlying price growth remained stubbornly high, adding to the case for the European Central Bank to hold interest rates a bit longer.

On the Open Forex Market (oanda.com), the Cedi lost by 1.54%, 1.56%, and 1.66% to trade at GHS 12.7284, GHS 16.1388, and GHS 13.8127 at the week’s opening from last week’s opening trade quotes of GHS 12.5353, GHS 15.8915, and GHS 13.5873 against the Dollar, the Pound, and the Euro respectively. The Dollar remained resolute against a basket of peers held by a Personal Consumption Expenditure price index which although cooled in January, remained well above the Fed’s annual inflation target, causing the market to price out chances of an early rate cut.

The Cedi was quoted at GHC 11.8859 on the first trading day of the year against the Dollar and is currently being sold at GHS 12.5082 indicating a YTD loss of 5.21% on the BoG inter-bank trading platform. It is also presently being quoted at GHS 12.7284 on the Open Forex Market (oanda.com) after opening the year at GHS 11.9945 indicating a YTD loss of 6.12%.