Currency News [June 24, 2024]

News that Ghana had reached an agreement in principle with its Eurobond creditors for the restructuring of the sovereign’s USD 13.0 billion worth of debt failed to revive the struggling local currency as the Cedi opened the week nursing losses against its three major trading partner currencies. The Cedi’s woes intensified as pressures from the ongoing strengthening of the US Dollar coupled with surging corporate demand for forex added to the local unit’s troubles.

The agreement reached with the International Committee representing 40.0% of bondholders and the Regional Committee representing 15.0% comes on the heels of a similar deal finalized with the Official Creditor Committee earlier this month. The deal is expected to accrue to Ghana USD 4.7 billion in debt relief and USD 4.4 billion in cash flow relief. It is also expected to expedite the process leading to the approval and the disbursement of the next tranche of USD 360.0 million under the IMF-assisted programme.

On the Bank of Ghana (BoG) inter-bank trading platform, the Cedi plunged by 1.14%, 1.01%, and 1.04% to weaken to GHS 14.4937, GHS 18.3795, and GHS 15.5508 at this week’s opening from last week’s opening trade levels of GHS 14.3301, GHS 18.1963, and GHS 15.3906 against the Dollar, the Pound, and the Euro respectively. The Dollar added to its recent gains against most of its trading pairs, boosted by the release of stronger-than-expected PMI readings, with the resilient US economy potentially creating more room for the Fed to keep rates higher.

On the Open Forex Market (oanda.com), the Cedi plummeted by 0.98%, 0.83%, and 1.00% to trade at GHS 15.1893, GHS 19.2410, and GHS 16.2817 at this week’s opening from last week’s opening trade quotes of GHS 15.0423, GHS 19.0825, and GHS 16.1198 against the Dollar, the Pound, and the Euro respectively. The Pound posted a relatively modest gain against the Cedi after UK policymakers said the decision not to cut rates was “fairly balanced”, raising hopes that policymakers will agree to a cut as early as August.

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 14.4937 indicating a YTD loss of 21.91% on the BoG inter-bank trading platform. It is also being quoted at GHS 15.1893 on the Open Forex Market (oanda.com) after opening the year at GHS 11.9945 indicating a YTD loss of 26.64%.