Ahead of a Monetary Policy Committee (MPC) meeting to review recent economic developments to enable the MPC to position the policy rate going forward, the Cedi fell against all its three major trading partner currencies on both the Bank of Ghana (BoG) inter-bank trading platform and on the Open Forex Market (oanda.com). The Cedi in recent times has been on a mild and sustained losing streak against the US Dollar, the British Pound Sterling, and the Euro. Against the US Dollar, in particular, the local currency began the week trading at an all-time low on the BoG inter-bank trading platform.
It is expected that the central bank will take a cautious stance in announcing the policy rate as any unfavourable stance may further add on to the woes of the local currency. Speaking to an international news network, Bloomberg, the Governor of the BoG stated that the central bank has the footing to continue the policy easing cycle as other economies move towards lower interest rate regimes. Governor Addison further mentioned that the current disinflation path remains supportive of a policy rate cut. This notwithstanding, the MPC will be expected to comment on the Cedi’s performance and possibly outline the central bank’s policies towards halting the Cedi’s recent weakness.
On the BoG inter-bank trading platform, the Cedi lost 0.41%, 2.83%, and 1.21% to trade at GHC 5.3057, GHC 6.5578, and GHC 5.8656 at the start of the week from previous week’s trade values of GHC 5.2840, GHC 6.3773, and GHC 5.7954 against the Dollar, the Pound and the Euro respectively. The Dollar posted gains against the Cedi despite expectations of a US rate cut amid a mixed performance in US jobs data which sent the greenback to a one-week low against some of its major trading partner currencies. The US Labour Department announced that domestic hiring of employees fell below expectations whiles wages growth rose marginally in its recent jobs data report.
On the Open Forex Market (oanda.com), the Cedi repeated similar performances on the inter-bank market as it depreciated 0.28%, 2.13%, and 0.87%, week-on-week, to begin the week at trading values of GHC 5.4978, GHC 6.7758, and 6.0699 from previous week’s trade values of GHC 5.4826, GHC 6.6344, and GHC 6.0178 against the Dollar, the Pound and the Euro respectively. The Cedi failed to build on previous week’s gains against the Pound as expectations that Britain will not crash out of the European Union without a trade deal (after UK legislators passed a bill to extend the Brexit deadline) restored confidence in the Pound. This, supported by recent better-than-anticipated UK economic data eased investors’ concerns about a technical recession in the UK.
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 5.3057 [September 9th, 2019] indicating a 9.87% 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 5.4978 [September 9th, 2019], representing a 12.71% year-to-date depreciation of the Cedi against the US Dollar.