Currency News [July 15, 2024]

Ahead of the presentation of the mid-year budget review to Ghana’s parliament next week where the market will be on the lookout for a statement from the fiscal authorities on the performance of the local currency in the first half of the year as well as strategies that the government intends to adopt to revive the currency, the Cedi remained sunk in the sea of red as it posted losses against its three major trading partner currencies.  Sustained pressures on the Cedi had forced the local currency to lose at least a quarter of its value against the US Dollar on the Open Forex Market at the close of the first half of the year.

Despite the intense pressures on the Cedi, intentional rating agency, Fitch, believes that the Cedi together with other sub-Saharan African currencies is poised to recover some of its losses in the second half of the year on the back of rising investor confidence, easing external conditions, and improved forex inflows. Fitch in its ‘Sub-Saharan Africa Currency Round-Up: Greater Stability Ahead In H2 2024’ report projected that the Cedi will “appreciate by 9.0% to GHS13.5/USD by year-end, from the July 9 spot of GHS14.7/USD”. It further noted that Ghana’s recent agreement with its international creditors “will improve investor sentiment towards Ghana, improve capital inflows, and provide appreciatory pressure to the unit.”

On the Bank of Ghana (BoG) inter-bank trading platform, the Cedi plunged by 0.11%, 1.29%, and 0.77% to open the week at trade values of GHS 14.7327, GHS 19.1112, and GHS 16.0625 from last week’s opening trade values of GHS 14.7159, GHS 18.8672, and GHS 15.9392 against the Dollar, the Pound, and the Euro respectively. The Dollar added to its gains against most of its trading pairs after some analysts said that the Trump assassination attempt boosted his chances of victory over Biden, given that Trump has signaled his intent to enact more protectionist trade policies.

On the Open Forex Market (oanda.com), the Cedi depreciated by 0.05%, 1.27%, and 0.69% to trade at GHS 15.4181, GHS 20.0048, and GHS 16.8066 at the week’s opening from last week’s opening trade quotes of GHS 15.4106, GHS 19.7532, and GHS 16.6916 against the Dollar, the Pound, and the Euro respectively. The Pound crossed the GHS 20.00 mark against the local currency boosted by data that showed that the British economy grew more quickly than expected in May.

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 14.7327 indicating a year-to-date (YTD) loss of 23.92% on the BoG inter-bank trading platform. It is also being quoted at GHS 15.4181 on the Open Forex Market (oanda.com) after opening the year at GHS 11.9945 indicating a YTD loss of 28.54%.