Currency News for July 20th 2020

As risk sentiments begins to revive across financial markets following progress made toward a COVID-19 vaccine, the Ghanaian Cedi posted its first weekly gain against the US Dollar in 2 months on the Bank of Ghana (BoG) inter-bank trading platform. The Cedi’s performance this week comes ahead of a monetary policy committee meeting as well as a mid-year budget review to be presented to Ghana’s parliament where it is expected that these two key events will among other things address the local currency’s recent worsening performance.

The Cedi has over the past three months remained under intense pressure as demand for forex by investors seeking to exit the local market coupled with demand by businesses expecting to pay dividends to its offshore owners outweighed supply. Recent results from the BoG’s forex forward rates auctions has shown demand for Dollars coming in excess of 3 times the offer amount over the past 2 months.

On the BoG inter-bank trading platform, the Cedi appreciated by 0.01% against the Dollar to trade at GHC 5.6742 at the start of the week from previous week’s trading figure of GHC 5.6746. Against the British Pound Sterling and the Euro, the Cedi depreciated by 0.22% and 0.66% to begin the week trading at GHC 7.1785 and GHC 6.4905 from previous week’s trade values of GHC 7.1625 and GHC 6.4481 respectively. The Cedi failed to end four weeks of weekly declines against the single currency after the Euro rose against most of its trading pairs following news that the European Union had struck a deal for a massive stimulus plan to revive its coronavirus-hit economies.

On the Open Forex Market (oanda.com), the Cedi appreciated by 0.47% and 0.53% to trade at GHC 5.7718 and GHC 7.2758 at the start of the week from previous week’s trade values of GHC 5.7992 and GHC 7.3142 against the Dollar and the Pound respectively. The Cedi recovered part of previous weeks’ dips against the Pound as the British currency was weighed down by the UK’s bleak economic outlook, Brexit risks, and the possibility of negative interest rates. Against the Euro, the Cedi lost 0.43% to trade at GHC 6.6037 at the start of the week from previous week’s trade value of GHC 6.5753.

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 5.6742 [July 20th, 2020] indicating a 2.48% 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 5.7718 [July 20th, 2020], representing a 1.33% year-to-date depreciation of the Cedi against the US Dollar.