Currency News [May 20, 2024]

The Cedi extended its free fall against its three major trading partner currencies on both the Bank of Ghana (BoG) inter-bank trading platform and the Open Forex Market (oanda.com) as speculative activities by market participants intensified the local currency’s woes. News that Ghana remains on track to secure the International Monetary Fund’s (IMF) board approval for the release of USD 360.0 million under Ghana’s Extended Credit Facility programme with the IMF had minimal bearing on the Cedi. This revelation was made by a staff of the IMF who asserted that Ghana is gaining the IMF’s confidence and support at a recent press conference in the US.

Last week, Ghana’s central bank intervened in the currency market, selling over USD 50.0 million on the spot market and an additional USD 20.0 million on the fortnight forex rates forward market to Bulk Oil Distribution companies. These measures among a host of intervention measures failed to give the local unit some respite as strong demand for forex by corporates amid forex hoarding worsened the pressures on the Cedi.

On the BoG inter-bank trading platform, the Cedi depreciated by 0.85% 2.00%, and 1.46% to begin the week at trade values of GHS 13.8464, GHS 17.5919, and GHS 15.0409 from last week’s opening trade values of GHS 13.7299, GHS 17.2475, and GHS 14.8238 against the Dollar, the Pound, and the Euro respectively. The Dollar firmed up against most weaker currencies despite being hit last week after a slowdown in US inflation reading lifted the likelihood of interest rate cuts by the Fed this year. However, comments by some Fed officials who remarked that they needed much more confidence that inflation was coming down helped to sustain the greenback.

On the Open Forex Market (oanda.com), the Cedi plunged by 2.17%, 3.49%, and 2.96% to open the week at trade values of GHS 14.3519, GHS 18.2352, and GHS 15.5988 from last week’s opening trade quotes of GHS 14.0475, GHS 17.6203, and GHS 15.1504 against the Dollar, the Pound, and the Euro respectively. The Euro was lifted up by some weaknesses in the Dollar, as well as a pickup in the Eurozone economy.

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 13.8464 indicating a YTD loss of 16.47% on the BoG inter-bank trading platform. It is also being quoted at GHS 14.3519 on the Open Forex Market (oanda.com) after opening the year at GHS 11.9945 indicating a YTD loss of 19.65%.