Currency News for June 29th 2020

As demand for forex continues to soar on the back of capital flight following coronavirus linked uncertainties, the Ghana Cedi extended its losing streak against the US Dollar on the Bank of Ghana (BoG) inter-bank trading platform. Auction results released by the BoG at its last forex forward auctions showed that bids tendered were 3.45 times the target amount the central bank aimed at selling. This gives an indication of a growing demand for forex as the cover ratio climbed up from 3.03 times at the 2^nd June auction to 3.45 times in the mid-June forex forward auction.

Offshore investor participation in last week’s 5-year fixed-rate bond which was largely oversubscribed is expected to boost the country’s forex reserves which should enable the central bank to continue to give support to the local currency. The bond attracted a total of GHC 1,458.63 million bids against a target amount of GHC 800.00 million, despite a decline in the yield from 21.70% to 19.25%.

On the BoG inter-bank trading platform, the Cedi depreciated by 0.27% and 0.09% to open the week trading at GHC 5.6702 and GHC 6.3701 from previous week’s trade values of GHC 5.6547 and GHC 6.3644 against the Dollar and the Euro respectively. The Dollar built on previous weeks’ gains against the Cedi as fears of a second wave of coronavirus infections reduced confidence in a quick global economic recovery. Against the British Pound Sterling, the Cedi recorded its third consecutive weekly gain this week as it appreciated by 1.09% to trade at GHC 6.9619 at the start of the week from previous week’s trade value of GHC 7.0384.

On the Open Forex Market (oanda.com), the Cedi appreciated by 0.07% and 0.85% to trade at GHC 5.8122 and GHC 7.1631 at the start of the week from previous week’s trade values of GHC 5.8160 and GHC 7.2242 against the Dollar and the Pound respectively. The Pound was weighed down by disappointing UK gross domestic product figures as well as Brexit concerns. Against the Euro, the Cedi lost momentum to build on previous week’s gain as it declined by 0.12% to trade at GHC 6.5380 at the start of the week from previous week’s trade value of GHC 6.5302.

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 5.6702 [June 29th, 2020] indicating a 2.41% 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 5.8122 [June 29th, 2020], representing a 2.04% year-to-date depreciation of the Cedi against the US Dollar.