Currency News for February 24th 2020

Predictions that the Cedi will maintain its stable performance in the first quarter of the year seem fairly supported as the Cedi began the last week in February extending its gains against its three major trading partner currencies on the Open Forex Market (oanda.com). On the Bank of Ghana (BoG) inter-bank trading platform, the Cedi posted a mixed performance against its three major trading pairs after recording its first weekly decline against the Euro whilst extending its gains against the Dollar and Pound for the fourth consecutive time this week.

The Cedi’s steadiness at the start of the week comes after the BoG in a move to further improve forex liquidity on the local market and ensure a stable currency launched a platform for commercial banks to use in the trading of forex in real-time. This comes barely six months since the BoG announced the forex forward auction which has significantly reduced uneasiness in the local forex market. According to the BoG, the platform – “Refinitiv Matching Platform” will improve price discovery and transparency through real-time access to live prices for both onshore and offshore stakeholders in the local inter-bank forex market.

On the BoG inter-bank trading platform, the Cedi appreciated 0.11% and 0.75% to trade at GHC 5.2845 and GHC 6.8329 at the start of the week from previous week’s trade values of GHC 5.2902 and GHC 6.8842 against the Dollar and the Pound respectively. The Cedi gained against the Dollar despite investors eyeing US assets as safe-haven instruments in the wake of the spread of the Coronavirus. However, expectations of a US rate cut this year to mitigate downside pressures on the US caused by the virus weighed on the greenback. Against the Euro, the Cedi depreciated by 0.05% to begin the week trading at GHC 5.7347 from previous week’s trade value of GHC 5.7316.

On the Open Forex Market (oanda.com), the Cedi appreciated 0.14%, 0.90%, and 0.16%, week-on-week, to trade at GHC 5.3333, GHC 6.8945, and GHC 5.7793 at the start of the week from previous week’s trade values of GHC 5.3409, GHC 6.9569, and GHC 5.7888 against the Dollar, the Pound, and the Euro respectively. The Euro fell against a host of trading pairs including the Cedi buoyed by sluggish growth in the bloc, risk of US trade tariffs, and low Euro volatility which increased the chances of Euro shorting.

According to the Bank of Ghana inter-bank rates, the Ghanaian Cedi began the year 2020 at GHC 5.5370 [January 2nd, 2020] against the US Dollar and is currently selling at GHC 5.2845 [February 24th, 2020] indicating a 4.56% year-to-date appreciation. Similarly, on the Open Forex Market (oanda.com), the Ghanaian Cedi traded at GHC 5.6961 [January 2nd, 2020] and is currently trading at GHC 5.3333 [February 24th, 2020], representing a 6.37% year-to-date appreciation of the Cedi against the US Dollar.