Currency News for February 7, 2022

The Ghana Cedi traded lower against its three major trading partner currencies, weighed down by lingering uncertainties surrounding the future of Ghana’s economy after Moody’s downgrade of the sovereign’s long-term issuer and senior unsecured debt ratings. According to the rating agency, the downgrade to Caa1 from B3 is a reflection of the increasingly difficult task the government faces addressing its intertwined liquidity and debt challenges.

The downgrade by Moody’s is the second after Fitch similarly downgraded Ghana’s Issuer Default Ratings to B- with a negative outlook on concerns of the government’s ability to stabilize the public debt. These developments paint a gloomy picture of Ghana’s economy which is likely to deter forex inflow to shore up the nation’s reserves. The local unit is expected to remain subdued against most of its peers in the near-term as investors continue to assess Ghana’s challenges.

On the Bank of Ghana (BoG) inter-bank trading platform, the Cedi was found wallowing in the sea of red as it plunged by 2.26%, 3.02%, and 4.42% to trade at GHS 6.1629, GHS 8.3365, and GHS 7.0523 at the start of the week from last week’s opening quotes of GHS 6.0266, GHS 8.0925, and GHS 6.7539 against the Dollar, the Pound, and the Euro respectively. The single currency rose sharply against the Cedi as it overturned a 0.51% year-to-date (YTD) loss last week to a YTD gain of 3.89%. This came on the back of a hawkish tone by the European Central Bank as it hinted of a rate hike later in the year.

On the Open Forex Market (oanda.com), the Cedi tumbled by 1.09%, 1.81%, and 3.83% to trade at GHS 6.4122, GHS 8.6735, and GHS 7.3330 at the start of the week from last week’s trade values of GHS 6.3432, GHS 8.5194, and GHS 7.0968 against the Dollar, the Pound, and the Euro respectively. The Pound was up against most of its peers following a 0.5% rate hike by the Bank of England, making it the first back-to-back increase since 2004.

The Cedi was quoted at GHC 6.0091 on the first official trading day of the year against the Dollar and is currently being sold at GHS 6.1629 indicating a YTD loss of 2.56% on the BoG inter-bank trading platform. It is also presently being quoted at GHS 6.4122 on the Open Forex Market (oanda.com) after opening the year at GHS 6.2112 indicating a YTD depreciation of 3.24%.