Currency News For December 2nd 2019

The Ghanaian Cedi began the week dipping to a record low against the US Dollar on both the Bank of Ghana (BoG) inter-bank trading platform and on the Open Forex Market (oanda.com). The Cedi’s weakened performance at the start of the week comes after the BoG failed to sell its intended target amount in its forward forex auctions, stoking fears about the capacity of the central bank to intervene in the currency space. The BoG’s fifth forward forex auction results indicated that the central bank sold USD 3.75 million as against its target amount of USD 25.00 million. Total bids submitted by the participating entities, however, were 3.34 times the target amount at USD 83.60 million. The huge demand for forex underscored recent pressures on the local currency as it fell to an all-time low against the Dollar, the British Pound Sterling, and the Euro on the BoG inter-bank trading platform.

According to data released by the BoG after the conclusion of its last Monetary Policy Committee (MPC) meeting for the year, significant gains had been made in Ghana’s Gross International Reserves (GIR) which should give the central bank the support to supply forex to meet the growing demand. The data revealed that favourable commodity prices coupled with increased export volumes impacted positively on the trade account which further widened Ghana’s trade surplus to USD 1.68 billion from USD 1.56 billion over the same period last year. Consequently, the GIR rose from USD 7.02 billion as at the close of last year to USD 8.70 billion as at mid-November, 2019.

On the BoG inter-bank trading platform, the Cedi extended its weekly losses against the Dollar to six weeks while erasing previous week’s gain against the Pound and the Euro. It depreciated by 2.75%, 3.04%, and 3.36%, week-on-week, to begin the week trading at GHC 5.5282, GHC 7.1512, and GHC 6.1247 from previous week’s trade values of GHC 5.3801, GHC 6.9403, and GHC 5.9258 against the Dollar, the Pound and the Euro respectively. The Dollar gained against a host of currencies on upbeat US data which boosted confidence in the greenback. US economic growth rose marginally in the third quarter in contrast to expectations of a slowdown in global activities.

On the Open Forex Market (oanda.com), the Cedi built on previous weeks’ losses against the three major trading partner currencies to extend its weekly losses against the three to two consecutive weeks. It lost 0.43%, 0.81%, and 0.65%, week-on-week, to trade at GHC 5.6343, GHC 7.2826, and GHC 6.2211 from previous week’s trading figures of GHC 5.6101, GHC 7.2242, and GHC 6.1806 against the Dollar, the Pound and the Euro respectively. The Cedi lost against the Pound as opinion poll results showed the ruling Conservative Party with a widened lead ahead of next week’s UK elections. A Conservative majority in UK’s parliament would make it easier for the UK to have a smooth break away from the bloc.

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 5.5282 [December 2nd, 2019] indicating a 14.68% 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 5.6343 [December 2nd, 2019], representing a 15.50% year-to-date depreciation of the Cedi against the US Dollar.