Weekly Currency News Report – Week 02 [January 12, 2025]

The Cedi opened the week weaker, recording losses 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). The Cedi’s performance this week represents its first weekly loss against the Dollar, the Pound, and the Euro over the past four weeks, where the Cedi had benefited from the release of funds from the International Monetary Fund (IMF) under Ghana’s Extended Credit Facility programme with the IMF, as well as the upsurge in remittance inflows during the festive season.

The local currency, however, has begun to face a headwind in the second week of the new year, largely stemming from increased demand from importers who are hoping to restock for the year amid a tepid foreign exchange supply. The Cedi’s near to medium-term outlook remains positive as Ghana’s international reserves hit record highs. According to the governor of the central bank, Ghana’s gross international reserves rose past USD 13.8 billion, representing nearly six months of import cover. This is expected to strengthen the hands of the central bank as it begins its market intermediation later in the month to help stabilize the local unit.

On the BoG inter-bank trading platform, the Cedi weakened by 1.04%, 0.74%, and 0.76% to be exchanged for GHS 10.7154, GHS 14.4357, and GHS 12.5115 at the start of the week from the previous week’s opening trade quotes of GHS 10.6053, GHS 14.3299, and GHS 12.4176 against the Dollar, the Pound, and the Euro, respectively. The Dollar maintained its foothold against a set of riskier currencies despite struggling against some major pairs after US prosecutors opened a criminal investigation into Fed Chair Jerome Powell, further threatening the independence of the US central bank.

On the Open Forex Market (oanda.com), the Cedi tumbled by 1.89%, 1.73%, and 1.66% to open the week at trade values of GHS 10.7325, GHS 14.4397, and GHS 12.5277 from last week’s opening trade quotes of GHS 10.5338, GHS 14.1940, and GHS 12.3227 against the Dollar, the Pound, and the Euro, respectively. The Pound Sterling came in strong against some of its trading pairs as event risk premium continues to be priced out and the UK economic data rebounds with fading uncertainty.

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 10.7154, indicating a Year-to-Date (YTD) depreciation of 2.00% on the BoG inter-bank trading platform. It is also currently quoted at GHS 10.7325 on the Open Forex Market (oanda.com), having opened the year at GHS 10.5253, indicating a YTD loss of 1.97%.