Weekly Currency News Report – Week 03 [January 19, 2025]

In the absence of any major intervention, the Cedi remained pressured as it recorded 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). Although the renewed pressures on the Cedi are mainly stemming from local developments, as the market gets jittery ahead of an impending policy rate cut by the BoG’s Monetary Policy Committee (MPC), some international developments have equally impacted negatively on the local unit alongside some emerging market and riskier currencies.

This comes as investors flocked to safe havens after the US president’s latest threats against Europe over Greenland sparked a broad risk-averse move across markets, hurting riskier assets and currencies. On the domestic front, analysts are concerned that the January sitting of the MPC could see another significant rate cut after inflation firmed into the single digit in December, a move which could lead to capital outflow from the domestic economy by offshore investors. This notwithstanding, the conclusion of the MPC sitting is expected to reveal that Ghana has made substantial gains in its gross international reserves, which should calm the market down.

On the BoG inter-bank trading platform, the Cedi plummeted by 1.21%, 0.89%, and 0.93%, having been sold for GHS 10.8454, GHS 14.5643, and GHS 12.6284 at the start of the week from last week’s opening trade quotes of GHS 10.7154, GHS 14.4357, and GHS 12.5115 against the Dollar, the Pound, and the Euro, respectively. The Pound gained against the Cedi and a basket of other trading pairs, after the UK reported better-than-expected economic figures last week, including higher-than-anticipated monthly GDP for November, stronger industrial production numbers, and as the housing market also showed signs of improvement, with estate agents expressing increased optimism about sales.

On the Open Forex Market (oanda.com), the Cedi plunged by 0.97%, 0.65%, and 0.63% to open the week at trade values of GHS 10.8364, GHS 14.5330, and GHS 12.6069 from last week’s opening trade quotes of GHS 10.7325, GHS 14.4397, and GHS 12.5277 against the Dollar, the Pound, and the Euro, respectively. The Euro edged higher over some of its trading pairs after data released late last week showed that German consumer prices were unchanged in December, climbing just 1.8%, below the European Central Bank’s 2.0% medium-term target.

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 10.8454, indicating a Year-to-Date (YTD) depreciation of 3.24% on the BoG inter-bank trading platform. It is also currently quoted at GHS 10.8364 on the Open Forex Market (oanda.com), having opened the year at GHS 10.5253, indicating a YTD loss of 2.96%.