Currency News [October 14, 2024]

Positive news that international rating agency, Moody’s, has upgraded Ghana’s long-term local and foreign currency issuer ratings to “Caa2” from “Caa3” and “Ca” respectively, boosting the West African nation’s chances of returning to the Eurobond market, did little to lift the Cedi’s struggles at this week’s opening. Moody’s also revised Ghana’s outlook to “positive” from “stable” whilst recognizing that extensive debt treatment has significantly alleviated the government’s financial burdens. The rating agency noted that the positive outlook reflected the potential for liquidity risk to ease amid the ongoing fiscal consolidation efforts under an IMF-supported programme.

The Cedi was however patted by the increased demand for forex by importers and body corporates ahead of the yuletide and news that the government has officially resumed payment of its Eurobond debt obligations following the successful completion of the debt exchange programme. According to analysts, this development will be expected to result in a heavy drawdown of Ghana’s already strangled forex reserves, worsening the Cedi’s outlook.

On the Bank of Ghana (BoG) inter-bank trading platform, the Cedi traded down by 0.57% and 0.28% against the Dollar and the Pound, haven opened the week at trade values of GHS 15.9780 and GHS 20.8577 from last week’s opening trade quotes of GHS 15.8879 and GHS 20.7989 respectively. Against the Euro, the Cedi was up by 0.18% to trade at GHS 17.4191 at the week’s opening from last week’s opening trade quote of GHS 17.4502. The single currency fell against a basket of currencies as the market moved to price in a 0.25% interest rate cut from the European Central Bank with near-certainty as data pointed to deteriorating Eurozone activity.

On the Open Forex Market (oanda.com), the Cedi tumbled by 0.51% and 0.20% to trade at GHS 15.9787 and GHS 20.8620 at the week’s opening from last week’s opening trade quotes of GHS 15.8972 and GHS 20.8197 against the Dollar and the Pound respectively. Data showing that the British economy recorded growth in August after two consecutive months of stagnation ahead of the Labour government’s first budget later in the month boosted the Pound’s appeal. Against the Euro, the Cedi narrowly lost by 0.01% to open the week at a trade value of GHS 17.4441 from last week’s opening trade value of GHS 17.4457.

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 15.9780 indicating a year-to-date (YTD) loss of 34.40% on the BoG inter-bank trading platform. It is also being quoted at GHS 15.9787 on the Open Forex Market (oanda.com) after opening the year at GHS 11.9945 indicating a YTD loss of 33.22%.