Currency News [May 30, 2022]

The Cedi this week fell across the board 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) as demand for forex surges amid a tight liquidity environment. The Cedi’s performance at the start of the week follows a similar performance posted last week as the local unit loses steam after a brief recovery over the past few weeks.

The Cedi has come under pressure buoyed by both domestic and international developments. On the domestic front, a rise in demand for forex as firms prepare to pay out dividends to their offshore investors is leaving a toll on forex liquidity. On the international front, interest rate hikes elsewhere are fueling capital flight as offshores abandon domestic assets in search of higher yields on their investments.

On the BoG inter-bank trading platform, the Cedi was down by 0.11%, 0.70%, and 1.13% from last week’s opening trade figures of GHS 7.1369, GHS 8.9746, and GHS 7.6179 to open this week at GHS 7.1449, GHS 9.0375, and GHS 7.7040 against the Dollar, the Pound, and the Euro respectively. The Euro added to its previous gains against the Cedi after inflation in the 19 member countries sharing the single currency accelerated to a record high at 8.1%, lifting hopes that the European Central Bank will soon hike the bloc’s interest rate.

On the Open Forex Market (oanda.com), the Cedi edged down by 0.27%, 0.91%, and 1.38% to begin the week trading at GHS 7.8502, GHS 9.9273, and GHS 8.4510 from last week’s opening quotes of GHS 7.8290, GHS 9.8381, and GHS 8.3356 against the Dollar, the Pound, and the Euro respectively. The Dollar continued its dominance against the local unit after the Fed hiked US rates by 0.50% in May to cool the hottest inflation in 40 years as expectations continue to grow for more future rate hikes.

The Cedi was quoted at GHC 6.0091 on the first trading day of the year against the Dollar and is currently being sold at GHS 7.1449 indicating a year-to-date (YTD) loss of 18.90% on the BoG inter-bank trading platform. It is also presently being quoted at GHS 7.8502 on the Open Forex Market (oanda.com) after opening the year at GHS 6.2112 indicating a YTD loss of 26.39%.