Currency News [November 4, 2024]

Recent assurances from the governor of the central bank failed to bring some calm into the local currency market as the Cedi began the week building on losses sustained against its three major trading partner currencies last week. Pressures on the Cedi have taken a new twist with the local unit losing by bigger margins at the week’s opening compared to recent weekly performances. This is coming on the back of rising demand for forex by importers and businesses ahead of the yuletide and as speculation sets in.

However, speaking at a private event in Accra last week, the Governor assured the general public that the central bank had substantial reserves to enable it to intervene in the currency market. Recent interventions by the central bank in the currency market include a USD 20 million auction to Bulk Oil Distributors (BDCs) as part of its bi-weekly auctions and an auction of a little over USD 80 million in its 7-day forward auction on the spot market. Whilst the Cedi is expected to remain pressured in the near term, the release of funds from the IMF and the World Bank is likely to give the Cedi some brief respite.

On the BoG inter-bank trading platform, the Cedi plunged by 1.55%, 1.27%, and 2.22% to begin the week trading at GHS 16.4082, GHS 21.2404, and GHS 17.8641 from last week’s opening trade values of GHS 16.1581, GHS 20.9748, and GHS 17.4761 against the Dollar, the Pound, and the Euro respectively. The Pound rose against a basket of currencies aided by short-term British government borrowing costs which headed for their biggest weekly jump in more than a year as the Labour Party’s tax-and-spend budget raised inflation expectations.

On the Open Forex Market (oanda.com), the Cedi traded down by 1.01%, 1.00%, and 1.79% to trade at GHS 16.3478, GHS 21.2024, and GHS 17.8061 at the week’s opening from last week’s opening trade quotes of GHS 16.1843, GHS 20.9918, and GHS 17.4929 against the Dollar, the Pound, and the Euro respectively. The Euro gained against a host of currencies after data revealed that the Eurozone’s inflation accelerated more than expected in October, bolstering the case for caution in the European Central Bank’s interest rate cuts direction.

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 16.4082 indicating a year-to-date (YTD) loss of 38.01% on the BoG inter-bank trading platform. It is also being quoted at GHS 16.3478 on the Open Forex Market (oanda.com) after opening the year at GHS 11.9945 indicating a YTD loss of 36.29%.