Currency News for May 11th 2020

As risk sentiments improve following the gradual easing of lockdown restrictions being imposed by several countries, the Ghanaian Cedi at the start of the week posted gains against its three major trading partner currencies on the Open Forex Market (oanda.com) after two weeks of consecutive declines. On the Bank of Ghana (BoG) inter-bank trading platform, the Cedi failed to recover from more than one month of weekly declines. It, however, gained momentum to post gains against the British Pound Sterling and the Euro.

The Cedi’s performance this week comes after a surprise jump in bids submitted for the BoG’s bi-weekly forex forward auctions. Auction results of the recent forex forward auction indicated that bids came in excess of 3.60 times compared with a 2.40 times at the last auction in April. It is unclear what might have contributed to the surge in demand, however, the offshore investors’ participation in the recent Government of Ghana 2-year fixed-rate should boost the country’s forex reserves in the short-term.

On the BoG inter-bank trading platform, the Cedi lost 0.07% against the Dollar as it traded at GHC 5.6077 at the start of the week from previous week’s trade value of GHC 5.6038. The Dollar gained against some of its trading pairs after the US Fed played down the likelihood of sending US rates into the negatives. Against the Pound and the Euro, the Cedi appreciated by 1.97% and 1.11% to begin the week trading at GHC 6.9233 and GHC 6.0613 from previous week’s trade values of GHC 7.0625 and GHC 6.1296 respectively.

On the Open Forex Market (oanda.com), the Cedi gained by 0.48%, 1.08%, and 1.39%, to trade at GHC 5.7832, GHC 7.1513, and GHC 6.2607 from previous week’s trading figures of GHC 5.8109, GHC 7.2292, and GHC 6.3490 against the Dollar, the Pound, and the Euro respectively. The Pound fell against a host of currencies including the Cedi as the currency market turned increasing short on the Pound on concerns over the government’s handling of the pandemic, which economists believe leaves the UK facing its worse recession in 300 years.

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 5.6077 [May 11th, 2020] indicating a 1.28% 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 5.7832 [May 11th, 2020], representing a 1.53% year-to-date depreciation of the Cedi against the US Dollar.