Currency News For October 14th, 2019

After posting a brief recovery supported by an announcement by the Bank of Ghana (BoG) to commence forward forex auctions, the Cedi fell against its three major trading partner currencies on both the BoG inter-bank trading platform and on the Open Forex Market (oanda.com) this week. The Cedi lost against its major trading partner currencies as recent positive developments in the US and Britain boosted investor confidence in the two economies. These developments outweighed gains that welcomed a move by Ghana’s central bank to auction USD 125.00 million through a forward forex contract following improved forex liquidity.

The local currency in the first three quarters of 2019 has been under intensive pressure against its three major trading partner currencies as economic growth in the first half of the year failed to meet expectations amid rising public sector debt which has increased investor nervousness. According to a report issued by the World Bank, growth in the Sub-Saharan region remained slow throughout the year, hampered by persistent uncertainty in the global economy and the slow pace of domestic reforms.

On the BoG inter-bank trading platform, the Cedi built on previous week’s losses registered against the Dollar, the Pound, and the Euro. It depreciated by 0.04%, 2.04%, and 0.34%, week-on-week, to begin the week trading at GHC 5.3247, GHC 6.6931, and GHC 5.8706 from previous week’s trade values of GHC 5.3228, GHC 6.5592, and GHC 5.8507 against the Dollar, the Pound, and the Euro respectively. The Dollar gained against most of its trading pairs including the Cedi on hopes for an amicable resolution to the US-China trade war after reports indicated the Chinese government was still open to agreeing to a partial trade deal with the US.

On the Open Forex Market (oanda.com), the Cedi erased its recent gains against the Dollar and the Pound and further extended its losses against the single currency. It dipped 0.30%, 2.52%, and 0.74% to trade at GHC 5.4496, GHC 6.8587, and 5.9867 at the start of the week from previous week’s trading figures of GHC 5.4334, GHC 6.6904, and GHC 5.9660 against the Dollar, the Pound, and the Euro respectively. The local currency fell against the Pound on reports of progress made on a key striking issue in the UK-EU divorce talks which restored hopes of an orderly Brexit.

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 5.3247 [October 14th, 2019] indicating a 10.26% 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 5.4496 [October 14th, 2019], representing an 11.72% year-to-date depreciation of the Cedi against the US Dollar.