Currency News for September 22nd 2020

The Ghana Cedi was unresponsive to news that Ghana’s economy had contracted by 3.2% in the second quarter of the year following an abysmal performance recorded by the hospitality sector. A strong growth recorded in the information and communication sector could not sustain growth in the second quarter as the economy faced a hit from the coronavirus pandemic. The Cedi remained resilient against its three major trading partner currencies as it gained against the British Pound Sterling and the Euro on both the Bank of Ghana (BoG) inter-bank trading platform and on the Open Forex Market (oanda.com).

The Cedi extended its relative stability this week as demand for forex eased amid the central bank’s continuous interventions in the spot and forward markets. Latest forex forward rates auction results showed that demand came in excess of 2.54 times the supply target of USD 25.00 million, down from a bid cover ratio of 3.00 months ago. Ghana’s Gross International Reserves is expected to be further strengthened by USD 1.3 billion Cocoa Syndicated loan facility which should shore up the central bank’s intervention in the spot and forward markets.

On the BoG inter-bank trading platform, the Cedi was unchanged against the US Dollar at GHC 5.7029. It appreciated by GHC 1.07% and 1.37% to begin the first trading day of the week at GHC 7.2614 and GHC 6.6790 from previous week’s opening figures of GHC 7.3401 and GHC 6.7720 against the Pound and the Euro respectively. The Cedi built on previous weeks’ gains against the Pound as the UK signaled that it was considering imposing a second nationwide lockdown after new coronavirus cases rose sharply in most parts of the country. This, coupled with the Bank of England considering implementing negative interest rates weighed on the Pound.

On the Open Forex Market (oanda.com), the Cedi fell by 0.20% against the Dollar to trade at GHC 5.8174 at the start of the week from previous week’s trade value of GHC 5.8058. The Dollar strengthened against many of its trading pairs as investors took solace in the greenback following a resurgence in COVID-19 cases in some countries. Against the Pound and the Euro, the Cedi rose by 0.36% and 0.87% to begin the week trading at GHC 7.4333 and GHC 6.8271 from previous week’s trade values GHC 7.4605 and GHC 6.8869 respectively.

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 5.7029 [September 22nd, 2020] indicating a 3.00% 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 5.8174 [September 22nd, 2020], representing a 2.13% year-to-date depreciation of the Cedi against the US Dollar.