The Cedi remained under intense pressure at the start of the week as it extended its losing streak against the US Dollar to twelve consecutive weeks on the Bank of Ghana (BoG) inter-bank trading platform. The Cedi touched a record low against Dollar on Wednesday, 26th June before recovering some of its losses to begin the week at a 3-day high on the BoG inter-bank trading platform. In a similar fashion, the Cedi also fell to a record low against the Euro and was on track to break through the GHC 6.0000 resistance level. On the Open Forex Market (oanda.com), the Cedi fell against all three of its major trading partner currencies as it erased previous week’s gains against the Dollar and built on previous week’s loss against the British Pound Sterling and the Euro. The Cedi’s performance at the start of the week comes ahead of a mid-year budget review where the government is expected to announce some fiscal measures aimed at enhancing revenue mobilization, drive inflation to year-end target of 8.0%, as well as interim measures to stabilize the Cedi.
As COCOBOD plans to raise a total of USD 1.3 billion from a syndicated loan agreement with twenty-two international financial institutions, it is suspected that the successful completion of the move will boost Ghana’s forex reserves which can support the central bank’s regular intervention in the forex market. According to COCOBOD, the proceeds from the funds are to aid it to finance cocoa beans purchases in the 2019/2020 crop season. Plans are far advanced as a roadshow has already been conducted and awaiting coupon rate for the loan from the syndicated banks.
On the BoG inter-bank trading platform, the Cedi posted a mixed performance as it lost to the Dollar but gained momentum to post gains against the Pound and the Euro. It lost 0.11%, week-on-week, to trade at GHC 5.2606 at the start of the week from previous week’s trade value of GHC 5.2548. Against the Pound and the Euro, the Cedi appreciated by 0.45% and 0.54% to begin the week at GHC 6.6552 and GHC 5.9522 from previous week’s trade values of GHC 6.6852 and GHC 5.9844 respectively. The Cedi gained against the Pound as political uncertainties surrounding Britain’s exit from the European Union weighed on the currency. Reports indicate that Pound investors and traders are reluctant to take big positions in the British currency amid a Conservative party leadership race.
On the Open Forex Market (oanda.com), the Cedi depreciated by 0.74%, 0.11%, and 0.15%, week-on-week, trading at the start of the week at GHC 5.4463, GHC 6.8953, and GHC 6.1665 from previous week’s trade figures of GHC 5.4060, GHC 6.8878, and GHC 6.1571 against the Dollar, the Pound and the Euro respectively. The greenback gained against the Cedi despite market expectations of multiple US rate cuts by the Fed which have spurred broad dollar selling. This comes on the back of weak economic data and trade disputes between the world’s largest two economies, the US and China.
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 5.2606 [July 1st, 2019] indicating an 8.94% 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 5.4463 [July 1st, 2019], representing an 11.65% year-to-date depreciation of the Cedi against the US Dollar.