Currency News [August 19, 2024]

The Cedi failed to capitalize on impending rate cuts in the advanced economies particularly in the US, UK, and the Eurozone as inflation in these economies continue to ease after reaching record highs prompting the central banks to begin interest rate normalization. The local currency fell across the board 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) at this this week’s opening in what appears to be a resurgence of intense pressure on the local currency after a brief reprieve.

The Cedi’s performance comes ahead of a scheduled interest payment by the government on the Domestic Debt Exchange Programme (DDEP) bonds where there are concerns of repatriation of investment proceeds by offshore investors at a time when demand pressures are building up amidst limited supply. Recent media reports are suggesting that Ghana’s COCOBOD may struggle to obtain the needed forex funding to support its cocoa beans purchases with lenders expressing caution due to a significant decline in cocoa production.

On the BoG inter-bank trading platform, the Cedi plummeted by 0.10%, 1.72%, and 1.41% to begin the week trading at GHS 15.1388, GHS 19.6425, and 16.7556 from last week’s opening trade quotes of GHS 15.1232, GHS 19.3108, and GHS 16.5233 against the Dollar, the Pound, and the Euro respectively. The Dollar held onto its recent gains against a basket of trading pairs after US retail sales data eased fears of a recession risk and dampened expectations for aggressive interest rate cuts.

On the Open Forex Market (oanda.com), the Cedi plunged by 0.02%, 1.62%, and 1.21% having opened the week at trade values of GHS 15.6273, GHS 20.2684, and GHS 17.2758 from last week’s opening trade values of GHS 15.6239, GHS 19.9456, and GHS 17.0701 against the Dollar, the Pound, and the Euro respectively. The Pound added to its gains against the Cedi boosted by data that showed that the British economy grew 0.6% in the second quarter and building on a rapid 0.7% recovery in the first quarter of the year.

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 15.1388 indicating a year-to-date (YTD) loss of 27.34% on the BoG inter-bank trading platform. It is also being quoted at GHS 15.6273 on the Open Forex Market (oanda.com) after opening the year at GHS 11.9945 indicating a YTD loss of 30.29%.