The Ghanaian Cedi at the start of the week extended its losing streak as it fell against all three major trading partner currencies on the Open Forex Market (oanda.com). On the Bank of Ghana’s (BoG) inter-bank trading platform, it gained marginally against the US Dollar but failed to post a recovery against the British Pound Sterling and the Euro. The local currency has in recent times remained under pressure despite assurances by the BoG to investors and market participants of sufficient reserves to stabilize the Cedi. In an address by a deputy governor of the BoG at the launch of Absa Africa Financial Markets Index 2019, Dr. Maxwell Opoku Afari noted that there was no need for investors and banks to panic since the BoG was in a position to provide support for the local currency when the need arises.
The Cedi’s weakened performance in recent times comes after the International Monetary Fund (IMF) in its latest edition of World Economic Outlook noted that the global economy was growing at its slowest pace since the 2008 financial crisis. This phenomenon has resulted mainly in investors fleeing for safe assets as US-China trade war coupled with Brexit uncertainties remains a worry. The IMF in its report also downgraded its earlier projection of 8.8% growth rate of Ghana’s economy to 7.5% as commodity prices remain moderate.
On the BoG inter-bank trading platform, the Cedi traded at GHC 5.3242 at the start of the week from previous week’s trading value of GHC 5.3247, representing a 0.01% appreciation against the Dollar. The greenback fell against a host of currencies including the Cedi after US retail sales data disappointed, painting a gloomy picture about the US economy and further supporting calls for a third rate cute. US retail sales fell for the first time in more than six months, suggesting that manufacturing-led weaknesses could be spreading to other sectors of the US economy. Against the Pound and the Euro, the Cedi depreciated by 3.27% and 1.06%, week-on-week, to begin the week trading at GHC 6.9118 and GHC 5.9329 from previous week’s trade figures of GHC 6.6931 and GHC 5.8706 respectively.
On the Open Forex Market (oanda.com), the Cedi depreciated by 0.56%, 3.53%, and 1.73% to trade at GHC 5.4800, GHC 7.1008, and GHC 6.1142 at the start of the week from previous week’s trading figures of GHC 5.4496, GHC 6.8567, and GHC 6.010 against the Dollar, the Pound, and the Euro respectively. The Cedi fell to a 7-month low against the Pound as rising optimism that the UK is poised to avoid a disorderly exit from the European Union boosted confidence in the Pound.
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 5.3242 [October 21st, 2019] indicating a 10.25% 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 5.4800 [October 21st, 2019], representing a 12.34% year-to-date depreciation of the Cedi against the US Dollar.