Currency News for November 1, 2021

Persistent and increasing support for the Cedi by the nation’s central bank has failed to revamp the falling local unit as the Cedi opened the week nursing losses against the Dollar on both the Bank of Ghana (BoG) inter-bank trading platform and the Open Forex Market (oanda.com). The Cedi’s recent weakness comes as conditions improve for overseas central banks to tighten monetary policy. This phenomenon has accordingly increased the Dollar and other major currencies’ appeal.

In a recent study on Ghana, an international rating agency, Fitch Ratings has warned that Ghana’s effective loss of access to the international market increases risks to its ability to meet medium-term financing needs. The ratings agency further expressed concern about the danger the country faces if offshore investors in domestic assets offload their investments in search of high and stable returns to be offered by the developed economies.

On the BoG inter-bank trading platform, the Cedi depreciated by 0.01% to open the week trading at GHC 5.9039 from last week’s opening quote of GHC 5.9031. The Dollar inched higher against the Cedi, extending its gains after strong inflation figures cemented the case for asset tapering and an onward rate hike in the US. Against the Pound and the Euro, the Cedi gained by 0.76% and 0.12% to trade at GHC 8.0664 and GHC 6.8452 from last week’s open trade values of GHC 8.1285 and GHC 6.8531 respectively.

On the Open Forex Market (oanda.com), the Cedi traded lower by 0.35% after it was quoted at GHC 6.1455 at the start of the week compared to GHC 6.1238 quoted at the opening of last week. It however rose by 0.37% and 0.08% against the Pound and the Euro as it opened the week trading at GHC 8.4013 and GHC 7.1148 from last week’s opening quote of GHC 8.4324 and GHC 7.1209 respectively. The Cedi recovered parts of its last week’s loss against the Euro after the European Central Bank failed to give any guidance as to when to begin lifting rates despite better than expected inflation figures in the zone.

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 5.9039 [November 1, 2021] indicating a 2.44% 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 6.1455 [November 1, 2021], representing a 4.36% ytd depreciation against the US Dollar.