Currency News for October 25, 2021

Pressures on the local currency intensified this week as the Cedi fell across the board against its three major trading partner currencies on both the Bank of Ghana (BoG) inter-bank trading platform and the Open Forex Market (oanda.com). The local unit has come under pressure amid increased forex demand from investors repatriating bond maturities proceeds to take advantage of sooner rate increases in industrialized economies where inflation is briskly picking up.

Last week, the government issued a 3-year fixed-rate bond in which the government sought to raise GHC 1.30 billion from both domestic and offshore investors. The medium-term was undersubscribed by 26% as weak participation by offshore investors failed to prop up demand by domestic investors. The Cedi is expected to continue to remain under pressure in the coming days as demand for forex by traders and importers also gathers momentum.

On the BoG inter-bank trading platform, the Cedi ticked lower by 0.31%, 0.67%, and 0.38% to trade at GHC 5.9031, GHC 8.1285, and GHC 6.8531 at the start of the week from last week’s opening trade values of GHC 5.8851, GHC 8.0744, and GHC 6.8271 respectively. The Dollar registered its seventh week-on-week gain against the Cedi this week boosted by better jobs and housing data, and rising US Treasury yields.

On the Open Forex Market (oanda.com), the Cedi traded lower by 0.42%, 0.69%, and 0.68% to begin the week quoted at GHC 6.1238, GHC 8.4324, and GHC 7.1209 from last week’s open trade figures of GHC 6.0982, GHC 8.3748, and GHC 7.0729 against the Dollar, the Pound, and the Euro respectively. The Pound added to its gains against the local currency over firming expectations that the Bank of England will hike UK rates as early as November.

According to the BoG inter-bank rates, the Ghana Cedi began the year 2021 at GHC 5.7631 [January 4th, 2021] against the US Dollar and is currently quoted at GHC 5.9031 [October 25, 2021] indicating a 2.43% year-to-date (ytd) depreciation. Similarly, on the Open Forex Market (oanda.com), the Ghanaian Cedi traded at GHC 5.8885 [January 4th, 2021] and is currently trading at GHC 6.1238 [October 25, 2021], representing a 4.00% ytd depreciation against the US Dollar.