The Ghanaian Cedi at the start of the week posted a mixed performance against 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 further extended its losing streak this week against the US Dollar on the BoG inter-bank trading platform, reinforcing the Dollar’s safe-haven appeal among investors in times of economic uncertainties. It, however, maintained its momentum to build on previous week’s gains against the Pound.
The Cedi is expected to be pressured to keep its stability in the second quarter of the year as recent data released by the central bank revealed that despite the unfavourable global developments, the performance of the external sector remains strong. This comes on the back of higher trade surplus and capital inflows as the trade balance recorded a surplus of over USD 900.0 million in the first quarter of the year compared with a trade surplus of USD 642.4 million over the same period last year. This development coupled with the recent USD 1.5 billion Rapid Credit Facility from the IMF is expected to further boost Ghana’s forex reserves and strengthen the capacity of the BoG to support the local currency.
On the BoG inter-bank trading platform, the Cedi lost 0.19% and 0.60% against the Dollar and the Euro to begin the week trading at GHC 5.6185 and GHC 6.0977 from previous week’s trade values of GHC 5.6077 and GHC 6.0613 respectively. The Dollar built on previous weeks’ gains against the Cedi after the Fed chair, Jerome Powell, squashed the idea of capitalizing on negative interest rates as a stimulus package. This calmed investors as they bought the greenback. Against the Pound, the Cedi gained 1.07% to trade at GHC 6.8495 at the start of the week from previous week’s trade value of GHC 6.9233.
On the Open Forex Market (oanda.com), the Cedi depreciated by 0.59% and 0.89% to start the week trading at GHC 5.8175 and GHC 6.3161 from previous week’s trade values of GHC 5.7832 and GHC 6.2607 against the Dollar and the Euro respectively. Against the Pound, the Cedi climbed by 1.15% to trade at GHC 7.0688 at the start of the week from previous week’s trade value of GHC 7.1513. The Pound’s loss against many of its trading pairs was driven by increasing speculation over the prospect of adopting negative interest rates in the UK.
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 5.6185 [May 18th, 2020] indicating a 1.47% year-to-date depreciation. 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 5.8175 [May 18th, 2020], representing a 2.13% year-to-date depreciation of the Cedi against the US Dollar.
