Selling of the Ghanaian Cedi continued this week as the local currency failed to gain momentum to reverse weeks of a trailing performance against the US Dollar on the Bank of Ghana (BoG) inter-bank trading platform. With the Cedi suffering a selloff as demand for forex surges, the Cedi reversed previous week’s gains posted against the British Pound Sterling and the Euro on the BoG inter-bank trading platform. The Cedi’s performance this week comes after the government sold GHC 503.95 in 10-year Treasury bond at an improved rate of 19.80% from 17.50% a year ago to both resident and offshore investors. It is expected that offshore investors’ participation in the longer-dated paper will boost Ghana’s Gross International Reserves to allow the BoG to auction off forex to meet the growing demand. On the Open Forex Market (oanda.com), the Cedi posted a mixed performance against its three major trading partner currencies where it rose marginally to recover parts of previous weeks’ losses posted against the Dollar but failed to build on previous week’s gains against the Pound and the Euro.
Economic growth figures released by the Ghana Statistical Services (GSS) for the first quarter of the year showed that the Ghanaian economy grew by 6.7% year-on-year as against a growth rate of 5.4% same period last year. The strong growth recorded in the first quarter of the year remains in line with an earlier projection by the IMF that has forecasted Ghana to be the fastest growing economy in the world with a growth rate of 8.8% in 2019. This robust growth rate is expected to boost investors’ confidence in the local economy in a bid to attract foreign direct investments. According to the GSS, the main drivers of the growth in the GDP were information & communication, health & social work, mining & quarrying and electricity.
On the BoG inter-bank trading platform, the Cedi lost against all set of major trading partner currencies as the Cedi posted a depreciation of 0.04%, 1.29%, and 1.43% against the Dollar, the Pound, and the Euro respectively. It traded at GHC 5.2548, GHC 6.6852, and GHC 5.9844 at the start of the week from previous week’s trade values of GHC 5.2525, GHC 6.6003, and GHC 5.9000 against the Dollar, the Pound, and the Euro respectively. The Pound came in strong against the Cedi to recovery from previous week’s dip after the Bank of England (BoE) voted unanimously to keep UK’s rates unchanged at 0.75% but noted that rates would need to rise in the near-term in a limited and gradual fashion as long as the UK avoided a damaging breakoff from the European Union.
On the Open Forex Market (oanda.com), the Cedi gained 0.04% against the Dollar to trade at GHC 5.4060 from previous week’s trade value of GHC 5.4079. The Dollar plummeted against a host of currencies including the Cedi following signals that the US Fed was prepared to lower interest rates later in the year amid growing tensions between the US and Iran. Against the Pound and the Euro, the Cedi lost 1.29% and 1.45% to trade at GHC 6.8878 and GHC 6.1571 at the start of the week from previous week’s trade values of GHC 6.8001 and GHC 6.0689 respectively.
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 5.2548 [June 24th, 2019] indicating an 8.82% 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 5.4060 [June 24th, 2019], representing a 10.82% year-to-date depreciation of the Cedi against the US Dollar.