Currency News for February 21, 2022

Expectations of interest rate hikes in the West continue to mount pressures on debt repayments for most fragile African economies with Ghana as no exception. The Cedi drifted to new lows against its three major trading partner currencies this week as the bi-weekly forex forward rates auctions among other measures of Ghana’s central bank does little to sustain the Cedi.

The sharp decline of the local unit over the past few weeks has attracted the attention of the president who has assured investors and the general public of measures to calm the Cedi’s free fall. Underlying challenges in Ghana’s economy has fueled portfolio outflows as investors flee for safety. Checks at the Central Securities Depository reveal that foreign investors’ holdings in local debt securities had dwindled to GHS 30.14 billion as of January compared to GHS 32.86 billion over the same period last year.

On the Bank of Ghana (BoG) inter-bank trading platform, the Cedi had plunged by 1.91%, 2.65%, and 2.18% to trade at GHS 6.4259, GHS 8.7457, and GHS 7.2844 on the first trading day of the week from last week’s opening quotes of GHS 6.3053, GHS 8.5203, and GHS 7.1293 against the Dollar, the Pound, and the Euro respectively. The Dollar together with other safe-havens rose on the back of geopolitical tensions as the Russia-Ukraine standoff continue to escalate.

On the Open Forex Market (oanda.com), the Cedi slid by 1.69%, 2.31%, and 1.87% to open the week trading at GHS 6.5989, GHS 8.9840, and GHS 7.4846 from last week’s opening trade values of GHS 6.4891, GHS 8.7810, and GHS 7.3475 against the Dollar, the Pound, and the Euro respectively. The Pound built on its gains against the Cedi after recent economic data pointed to a strong recovery in the UK, supporting the recent rate hikes.

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 6.4259 indicating a year-to-date (YTD) loss of 6.94% on the BoG inter-bank trading platform. It is also presently being quoted at GHS 6.5989 on the Open Forex Market (oanda.com) after opening the year at GHS 6.2112 indicating a YTD depreciation of 6.24%.