Currency News for March 2nd 2020

The Ghanaian Cedi at the start of the third month of the year posted its first decline in seven weeks against its three major trading partner currencies on the Open Forex Market (oanda.com) as concerns over the fast-spreading coronavirus sent investors out of currencies and economies deemed as risky. On the Bank of Ghana (BoG) inter-bank trading platform, however, the Cedi posted a mixed performance against its three major trading pairs. It erased part of previous weeks’ gains made against the US Dollar and the Euro to fall to a more than 2 and 3 weeks low against the Dollar and the Euro respectively. Against the British Pound Sterling, the Cedi built on previous weeks’ gains to extend its weekly gains to five weeks.

As against expectations, the BoG sold a lesser amount in its recent forex forward auctions which raised concerns about the capability of the central bank to continue to support the Cedi ahead of the 2020 general elections. Total bids tendered for the 7-day, 15-day, and 30-day tenors came in at USD 42.25 million, however, the BoG sold USD 25.00 million against its target amount of USD 40.00 million.

On the BoG inter-bank market, the Cedi depreciated by 0.27% and 2.96% to trade at GHC 5.2990 and GHC 5.9047 from previous week’s trade values of GHC 5.2845 and GHC 5.7347 against the Dollar and the Euro respectively. The Dollar gained against the Cedi and a host of trading pairs as growing fears that a coronavirus outbreak is turning into a pandemic boosted demand for the safety of US Treasury assets. The Cedi appreciated by 0.88% against the Pound to trade at GHC 6.7727 at the start of the week from previous week’s trade figure of GHC 6.8329.

On the Open Forex Market (oanda.com), the Cedi fell by 1.47%, 0.40%, and 3.98%, week-on-week, to begin the week trading at GHC 5.4115, GHC 6.9223, and GHC 6.0091 from previous week’s trading values of GHC 5.3333, GHC 6.8945, and GHC 5.7793 against the Dollar, the Pound, and the Euro respectively. The Pound fell against some of its trading pairs after the UK confirmed a hardline position on trade talks with the EU which raised investor nervousness.

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 5.2990 [March 2nd, 2020] indicating a 4.30% 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 5.4115 [March 2nd, 2020], representing a 5.00% year-to-date appreciation of the Cedi against the US Dollar.