The Ghanaian Cedi began the week showing signs of traction as it began to reverse previous week’s losses against its three major trading partner currencies on the Open Forex Market (oanda.com). On the Bank of Ghana (BoG) inter-bank trading platform, it trimmed down its losses recorded last week against the US Dollar, the British Pound Sterling and the Euro. The Cedi fell to an all-time low against the greenback on the BoG inter-bank market as it continued to nurse marginal losses. The Cedi’s performance this week comes ahead of a Monetary Policy Committee (MPC) of the BoG meeting to review recent economic developments to enable the MPC appropriately position the benchmark policy rate going forward. It is expected that the MPC would take a cautious stand in its first policy rate announcement for the year after stalling the policy at 17.0% for the third consecutive time at its last meeting in November, 2018. Ahead of the meeting, analysts are calling for policies that will further attract foreign investments into the country to prop up the supply of forex in the domestic currency market.
After the International Monetary Fund (IMF) cut its forecasts for the world economy in 2019 and 2020, the Cedi and other emerging market currencies are likely to be pressured to maintain stability as investors are likely to go long on safe haven currencies and assets in this year and the next. The IMF revealed in its report that weakness in the Eurozone area and some emerging markets contributed to the downward revision of its global growth forecast.
On the BoG inter-bank trading platform, the Cedi posted a mixed performance against its three major trading partner currencies. It depreciated by 0.72% and 0.92% to begin the week at GHC 4.9126 and GHC 6.3250 from previous week’s trade values of GHC 4.8775 and GHC 6.2676 against the US Dollar and the British Pound Sterling respectively. The Cedi built on previous week’s loss against the Pound to record a year-to-date depreciation of 3.89% after the UK Prime Minister, Theresa May, survived a vote of no-confidence. Her survival calmed investors’ nerves as many interpreted the vote as a hard or no-deal Brexit unlikely to occur. Against the Euro, the Cedi gained 0.14%, week-on-week, to trade at GHC 5.5840 at the start of the week from previous week’s trade figure of GHC 5.5916.
On the Open Forex Market (oanda.com), the Cedi appreciated against all three sets of trading partner currencies as it regained part of previous week’s losses. It gained 0.20%, 0.07% and 1.05% to begin the week at GHC 4.9337, GHC 6.3519 and GHC 5.6106 from previous week’s opening trade values of GHC 4.9436, GHC 6.3563 and GHC 5.6703 against the Dollar, the Pound and the Euro respectively. The Cedi gained against the greenback as US government shutdown begins to weigh on domestic growth. The longest US government shutdown has currently entered into day 31.
According to the Bank of Ghana inter-bank rates, the Ghanaian Cedi began 2019 at GHC 4.8291 [January 2nd, 2019] against the US Dollar and is currently selling at GHC 4.9126 [January 21st, 2019] indicating a 1.73% year-to-date depreciation. Similarly, on the Open Forex Market (oanda.com), the Ghanaian Cedi traded at GHC 4.8780 [January 2nd, 2019] and is currently trading at GHC 4.9337 [January 21st, 2019], representing a 1.14% year-to-date depreciation of the Cedi against the US Dollar.