Weekly Currency News Report – Week 04 [January 26, 2025]

Ahead of the announcement of the monetary policy rate later in the week, where market watchers are bracing themselves for yet another policy rate cut, the Ghanaian Cedi remained subdued 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). Currency analysts fear that any unmeasured cut in the policy rate may culminate in capital flight, as offshore investors may want to explore other markets with relatively higher returns.

Opening the first monetary policy committee meeting for the year, the governor of the central bank acknowledged the renewed pressures on the local unit, attributing the Cedi’s recent struggles to seasonal currency dynamics. He, however, remarked that after the Cedi showed strong resilience in 2025 on the back of improved confidence and a strong external position, the central bank in the present year would be aiming to sustain the Cedi’s gains by managing expectations. The renewed pressure on the Cedi in the early sessions of the year is mainly stemming from increased demand pressures amid a limited supply of forex. This notwithstanding, a strong forex reserves position of USD 13.8 billion, representing 5.7 months of import cover, is expected to help stabilize the local currency.

On the BoG inter-bank trading platform, the Cedi traded down by 0.55%, 2.64%, and 2.72% to open the week, being sold for GHS 10.9055, GHS 14.9492, and GHS 12.9722 from last week’s opening trade quotes of GHS 10.8454, GHS 14.5643, and GHS 12.6284 against the Dollar, the Pound, and the Euro, respectively. The Pound gained against the Cedi and other trading pairs after the release of data, which showed that British retail sales rose unexpectedly in December, adding to signs of a pickup in the UK economy.

On the Opening Forex Market (oanda.com), the Cedi depreciated by 0.46%, 2.43%, and 2.48% to trade at GHS 10.8866, GHS 14.8857, and GHS 12.9191 at the start of the week from last week’s opening trade quotes of GHS 10.8364, GHS 14.5330, and GHS 12.6069 against the Dollar, the Pound, and the Euro, respectively. The Euro rose against a basket of currencies, benefiting from the flows out of the Dollar as well as positive signs of a recovery in the wider eurozone economy.

The Cedi was quoted at GHC 10.5053 on the first trading day of the year against the Dollar and is currently trading at GHS 10.9055, indicating a Year-to-Date (YTD) depreciation of 3.81% on the BoG inter-bank trading platform. It is also currently quoted at GHS 10.8866 on the Open Forex Market (oanda.com), having opened the year at GHS 10.5253, indicating a YTD loss of 3.43%.