Ghana Cedi loses grounds to US dollar and British Pound -But advances against Euro      

Ghana Cedi loses grounds to US dollar and British Pound  -But advances against Euro      
  • A total of GH¢509.54 million bids were accepted by the Government at the week’s auction out of the GH¢757.27 million tendered by investors.
  • The British pound however advanced by 0.29 percent to trade at GH¢6.89 on the interbank currency market. The year-to-date appreciation of the cedi thus dropped to 6.29 percent.
  • Eurozone is projected to grow at negative 7.5 percent in 2020 from the 0.3 percent growth recorded in 2019.
  • The US dollar bolstered by a reemerging economy appreciated by 0.08 percent to trade at GH¢5.51 on the interbank currency market

 

The Ghana cedi lost grounds to both the US dollar and the British pound but advanced against the Euro for the week ending, April 17.

According to IGS Financial Services, the US dollar was buoyed by the cautious optimism of investors after a drug trail of the COVID-19 disease provided encouraging results.

The decision by the US President – Trump to reopen the US economy to address the unprecedented rise in unemployment benefits last month also supported the greenback to outmuscle the local currency.

The US dollar thus appreciated by 0.08 percent to trade at GH¢5.51 on the interbank currency market. The year-to-date appreciation of the cedi thus dropped to 0.43 percent.

The British pound also closed the trading week in the gains after UK’s government extended it coronavirus lockdown for additional three weeks to effectively fight the COVID-19 disease last Thursday.

According to the IGS, this subdued the International Monetary Fund’s growth projections for the UK economy which is tipped to contract by 6.5 percent in 2020 about twice of the projected decline for the global economy.

The British pound however advanced by 0.29 percent to trade at GH¢6.89 on the interbank currency market. The year-to-date appreciation of the cedi thus dropped to 6.29 percent.

The Euro, however, tumbled on account of multi-factors ranging from economic data to fiscal stimulus measures adopted by the bloc to fight the global pandemic.

THE IGS also reports that inflation from the bloc made a sharp wrong turn from the central banks benchmark of 2 percent as it dropped below 1 percent to 0.7 percent with reasoning’s attributed to the COVID-19 pandemic.

On account of this, Eurozone is projected to grow at negative 7.5 percent in 2020 from the 0.3 percent growth recorded in 2019.

The Euro thus depreciated by 0.48 percent to trade at GH¢6.00 on the interbank currency market with the year-to-date appreciation of the cedi rising to 3.61 percent.

 Treasury securities

Interest rates on the Government of Ghana treasury securities, for the week ending, April 17, witnessed another round of moderation.

The yield on the 91-Day T-Bill was slashed by 3 basis points to settle at 13.85 percent. The 182-Day T-Bill eased by 14 basis points to settle at 13.99 percent whereas that on the 364-Day T-Bill remained unchanged at 16.79 percent as it was not scheduled for the week's auction.

Interest rate on the 3-Year Bond also moderated at the auction by 175 basis points to 19.00 percent. The yields on the other Government of Ghana treasury bonds and notes were, however, unaltered as they were not scheduled for the week’s auction.

A total of GH¢509.54 million bids were accepted by the Government at the week’s auction out of the GH¢757.27 million tendered by investors.

This was below the week’s target of GH¢677.00 million and below the GH¢1.63 billion raised at the previous auction. Government also raised a total of GH¢849.24 million from the insurance of a 3-Year bond, bringing total bids accepted to GH¢1.36 billion.

An amount of GH¢1.21 billion is scheduled to be raised from the sales of the 91-Day, 182-Day and 364-Day T-Bills at the upcoming auction.