Currency News [May 6, 2024]

The Cedi remained pressured into the fifth month of the year as it began the week posting losses 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). The local unit which has seen a drastic and sustained fall since February continues to struggle as several domestic and international developments mount intense pressures on the Cedi.

On the international front, the broad strengthening of the US Dollar as economic variables point to a resilient US economy has increased expectations that the Fed will continue to keep US rates at their prevailing 2-decade high longer than expected. On the domestic front, strong corporate demand for forex fueled by impending dividends and other entitlement payments to offshore partners amid limited forex supply has contributed to the Cedi’s struggles. Beforehand, the Cedi was troubled by delayed inflows from Ghana’s development partners, delayed cocoa syndicated loan proceeds, and uncertainties that surrounded the review of Ghana’s programme with the IMF.

On the BoG inter-bank trading platform, the Cedi fell by 1.71%, 1.90%, and 2.30% to begin the week at trade values of GHS 13.4775, GHS 16.9453, and GHS 14.5266 from last week’s opening trade values of GHS 13.2508, GHS 16.6298, and GHS 14.2001 against the Dollar, the Pound, and the Euro respectively. The Pound strengthened against some of its trading pairs including the Cedi after data revealed that the UK’s key services sector remained in a healthy state, a development the market presumed to mean more room to delay rate cuts.

On the Open Forex Market (oanda.com), the Cedi traded down by 1.22%, 1.41%, and 1.72% to open the week trading at GHS 13.7765, GHS 17.3107, and GHS 14.8390 from last week’s opening trade quotes of GHS 13.6104, GHS 17.0692, and GHS 14.5875 against the Dollar, the Pound, and the Euro respectively. The Dollar remained firm against most weaker currencies despite softer-than-anticipated nonfarm payrolls data which eased concerns that the Fed would keep interest rates higher for longer.

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 13.4775 indicating a YTD loss of 13.36% on the BoG inter-bank trading platform. It is also being quoted at GHS 13.7765 on the Open Forex Market (oanda.com) after opening the year at GHS 11.9945 indicating a YTD loss of 14.86%.