Currency News for November 2nd 2020

The Ghanaian Cedi extended its weekly losses against the US Dollar for the sixth consecutive time this week on the Bank of Ghana (BoG) inter-bank trading platform as demand pressures continue to mount ahead of the yuletide. The local currency is, however, on course to post its biggest year-end performance against the Dollar in more than five years as sound monetary policies instituted by the central bank has mainly been supportive of the Cedi’s performance.

The Cedi’s general weakness against the Dollar comes as recent results of the BoG’s forex forward rates auctions showed signs of increasing demand by importers and investors despite a constant supply of Dollars on the platform. Auction results from late October showed that demand came in excess of 3.08 times the intended target amount of USD 25.00 million, up from 2.54 times over the same period in September. Readiness by the BoG to continue to support the local currency on both the spot and forward markets will be expected to cap any shock to the Cedi’s trajectory for the remainder of the year.

On the BoG inter-bank trading platform, the Cedi lost by 0.06% against the Dollar to trade at GHC 5.7139 at the start of the week from previous week’s trade value of GHC 5.7104. The Dollar gained against a host of currencies including the Cedi as investors took positions in safe-haven currencies amid jitters of a contested US election and a continued rise in global COVID-19 cases that has forced lockdowns in some parts of Europe. Against the Pound and the Euro, the Cedi appreciated by 0.87% and 1.54% to begin the week trading at GHC 7.3732 and GHC 6.6473 from previous week’s trade values of GHC 7.4377 and GHC 6.7511 respectively.

On the Open Forex Market (oanda.com), the Cedi lost by 0.10% against the Dollar to begin the week trading at GHC 5.8343 from previous week’s trading value of GHC 5.8284. The Cedi traded at GHC 7.5335 and GHC 6.7904 against the Pound and the Euro at the start of the week after gaining 0.78% and 1.46% from previous week’s trading figures of GHC 7.5930 and GHC 6.8912 respectively. The Cedi recovered from previous week’s dip against the Pound after the UK Prime Minister announced a one-month lockdown across England, a move which cast doubts of an economic recovery in the near-term 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 5.7139 [November 2nd, 2020] indicating a 3.19% 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 5.8343 [November 2nd, 2020], representing a 2.43% year-to-date depreciation of the Cedi against the US Dollar.