Weekly Currency News Report – Week 05 [February 2, 2025]

The renewed pressures on the Cedi continued for the fourth straight week, as the Cedi opened this week with losses across the board against its three major trading partner currencies on the Open Forex Market (oanda.com). On the Bank of Ghana (BoG) inter-bank trading platform, however, the Cedi was mixed, extending its losses against the Dollar and the Pound but strengthening against the Euro. The governor of the central bank, in an attempt to allay fresh fears surrounding the local unit, attributed the Cedi’s recent struggles to speculative activities and seasonal trends while urging calm.

This followed the central bank’s latest policy rate cut, slashing the prime rate by 250 basis points to 15.5%, a move that market watchers had earlier expressed concerns could lead to capital flight, as offshore investors may want to flee the domestic market in search of higher returns elsewhere. This notwithstanding, it is expected that strong macroeconomic numbers released after the conclusion of the BoG’s first policy rate sitting for the year would help reassure the market of the Cedi’s positive outlook. According to the BoG, 2025 ended with a provisional current account surplus of USD 9.1 billion, up from USD 1.5 billion in 2024, largely driven by strong gold export earnings, increased private transfers, and moderation in services and income payments. This, together with high capital inflows, resulted in a provisional balance of payments surplus of USD 3.98 billion, with Gross International Reserves also edging up to 13.8 billion, equivalent to 5.7 months of import cover.

On the BoG inter-bank trading platform, the Cedi depreciated by 0.55% and 0.15% to trade at GHS 10.9655 and GHS 14.9712 at this week’s start from last week’s opening trade quotes of GHS 10.9055 and GHS 14.9492 against the Dollar and the Pound, respectively. The Cedi, along with other emerging market currencies, lost against the Dollar, with the greenback helped by the Fed’s decision to keep US interest rates steady, citing still-elevated inflation alongside solid economic growth, whilst giving little indication in its latest policy statement of when borrowing costs might fall again. Against the Euro, the Cedi appreciated by 0.21% to open the week trading at GHS 12.9452 from last week’s opening trade quotes of GHS 12.9722.

On the Open Forex Market (oanda.com), the Cedi traded down by 1.04%, 1.06%, and GHS 0.76%, having been offered for GHS 11.0000, GHS 15.0436, and GHS 13.0169 at the start of the week from last week’s opening trade quotes of GHS 10.8866, GHS 14.8857, and GHS 12.9191 against the Dollar, the Pound, and the Euro, respectively. The Euro gained against a basket of currencies after data showed that the Eurozone’s largest economies grew at a modest but steady pace last year, as Spain, Germany, France, and Italy grew by 0.8%, 0.3%, 0.2%, and 0.3%, respectively.

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 10.9655, indicating a Year-to-Date (YTD) depreciation of 4.38% on the BoG inter-bank trading platform. It is also currently quoted at GHS 11.0000 on the Open Forex Market (oanda.com), having opened the year at GHS 10.5253, indicating a YTD loss of 4.51%.