Latest news with #cedi
Reuters
6 days ago
- Business
- Reuters
AFRICA-FX- Ghana's cedi to strengthen further next week
NAIROBI, May 29 (Reuters) - Ghana's cedi is forecasted to gain strength in the coming week, bolstered by continued remittance inflows and interventions from the central bank, while Kenya's shilling is expected to remain steady, and Nigeria's naira to stay range-bound, traders said. The cedi currency has jumped more than 40% versus the U.S. dollar this year, far outperforming its African and emerging market peers. Data from the London Stock Exchange Group (LSEG) showed the cedi trading at 10.25 to the dollar on Thursday, compared to 11.55 per dollar at last Thursday's close. "The cedi has remained on the front foot for much of the last week, however, we've observed some increased hard currency demand from offshore players in the most recent sessions as they look to take profit from GHS investments," Sedem Dornoo, a senior trader at Absa Bank Ghana, said. "We reckon we'll continue to see support around current 10 levels in the very near term, however, it's likely that the local unit will begin to rally again when this demand is cleared as the central bank continues to provide daily support to the market," he added. Kenya's shilling is expected to hold steady next week. The shilling traded at 129.00/50 per dollar, compared with last Thursday's close of 128.95/129.45. Traders forecast Nigeria's naira to maintain its trading range in the coming week, even amid demand from importers. The naira's stability is expected to be supported by the central bank's weekly dollar sales and inflows from portfolio investors. The naira was quoted around 1,587 to the dollar in intraday trading on Thursday versus last week's closing quote of 1,586 naira. The currency was changing hands around t 1,635 to the dollar in street trading on Thursday. "I see naira trading between 1,580 and 1,590, supported by the central bank's dollar sale. Though volatility remains possible, domestic policy and dollar inflows could help anchor the market," one trader said. The Ugandan shilling is expected to firm against the dollar, helped by inflows from this week's Treasury auction, traders said. At 0811 GMT commercial banks quoted the shilling at 3,627/3,637, compared to last Thursday's close of 3,645/3,655. "There was significant offshore (dollar) inflows into the bond auction which I think will give the shilling a boost," said a trader at one commercial bank. The central bank this week held a large and rare private placement treasury bond auction where a total of 2.4 trillion Ugandan shillings ($661.70 million) worth of debt was on offer.
Zawya
28-05-2025
- Business
- Zawya
Surge in cedi currency eases Ghana's foreign debt burden
Ghana's cedi currency has jumped more than 40% versus the U.S. dollar this year, far outperforming its African and emerging market peers, shrinking the cost of the country's foreign debt and giving it more fiscal breathing room. The rally, which has surprised some investors, is another much-needed boost for the West African nation as it claws its way back from debt default and a punishing economic crisis. In all the cedi has gained 42% against the dollar since January, changing hands near 10.20 to the greenback on Wednesday morning according to LSEG data. "We have reduced our total debt over the last five months by almost 150 billion cedis which is very significant," Ghanaian President John Mahama told a session during the African Development Bank annual meeting in Abidjan this week, citing the cedi strength. "If that trajectory continues, the target of reaching 55-58% debt sustainability by 2028 will be reached by the end of this year. And that means that it begins to give us fiscal space to begin to invest in the most productive sectors of the economy," he said. While the U.S. dollar has also been under pressure this year, the cedi's performance stands in stark contrast to other African currencies. Investment bank JPMorgan, in a note to clients, said the gold windfall - with prices having chalked up 28 record highs by April - was a tailwind for the cedi. Tellimer's Hasnain Malik, in a note, said the country's on-track International Monetary Fund programme, as well as restrictive monetary policy, have also helped the "extraordinary spike". Lutz Röhmeyer, head of portfolio management at Capitulum Asset Management, said local Ghanaian holders of U.S. dollar debt exchanging their money back into cedis was also helping the gains. On Monday, Ghana's central bank governor Johnson Asiama, speaking at the Ghana CEO Summit in Accra, said the central bank had not used its own reserves to support the cedi. He cited tight monetary policy, cleaner FX auctions and stronger remittance flows. But Malik and Röhmeyer each warned that the rally may not last. "There are reasons for caution after this spike," Malik wrote in the Tellimer note, citing drops in oil and cocoa prices, IMF forecasts that implied a coming depreciation.
Reuters
28-05-2025
- Business
- Reuters
Surge in cedi currency eases Ghana's foreign debt burden
JOHANNESBURG, May 28 (Reuters) - Ghana's cedi currency has jumped more than 40% versus the U.S. dollar this year, far outperforming its African and emerging market peers, shrinking the cost of the country's foreign debt and giving it more fiscal breathing room. The rally, which has surprised some investors, is another much-needed boost for the West African nation as it claws its way back from debt default and a punishing economic crisis. In all the cedi has gained 42% against the dollar since January, changing hands near 10.20 to the greenback on Wednesday morning according to LSEG data. "We have reduced our total debt over the last five months by almost 150 billion cedis which is very significant," Ghanaian President John Mahama told a session during the African Development Bank annual meeting in Abidjan this week, citing the cedi strength. "If that trajectory continues, the target of reaching 55-58% debt sustainability by 2028 will be reached by the end of this year. And that means that it begins to give us fiscal space to begin to invest in the most productive sectors of the economy," he said. While the U.S. dollar has also been under pressure this year, the cedi's performance stands in stark contrast to other African currencies. Investment bank JPMorgan, in a note to clients, said the gold windfall - with prices having chalked up 28 record highs by April - was a tailwind for the cedi. Tellimer's Hasnain Malik, in a note, said the country's on-track International Monetary Fund programme, as well as restrictive monetary policy, have also helped the "extraordinary spike". Lutz Röhmeyer, head of portfolio management at Capitulum Asset Management, said local Ghanaian holders of U.S. dollar debt exchanging their money back into cedis was also helping the gains. On Monday, Ghana's central bank governor Johnson Asiama, speaking at the Ghana CEO Summit in Accra, said the central bank had not used its own reserves to support the cedi. He cited tight monetary policy, cleaner FX auctions and stronger remittance flows. But Malik and Röhmeyer each warned that the rally may not last. "There are reasons for caution after this spike," Malik wrote in the Tellimer note, citing drops in oil and cocoa prices, IMF forecasts that implied a coming depreciation.
News24
07-05-2025
- Business
- News24
Ghana rides high with a world-beating currency
• For more financial news, go to the News24 Business front page. Ghana's inflation rate fell to an eight-month low in April as the West African nation's world-beating currency helped rein in import costs. Consumer prices rose 21.2% in April, compared with 22.4% the month before, Government Statistician Alhassan Iddrisu told reporters in the capital, Accra, on Wednesday. Prices rose 0.8% in the month. Non-food price growth decelerated to 17.9% from 18.7%, as a rally in the cedi reduced the cost of imports. The currency has strengthened almost 16% against the dollar since the start of April, making it the world's best-performing currency, according to data compiled by Bloomberg. Food inflation cooled to 25% from 26.5%. The data is unlikely to persuade the central bank to lower interest rates later this month, as it awaits further evidence of a slowdown in price-growth after its surprise 100 basis-point increase in March to 28%, said Agyapomaa Gyeke-Dako, a senior lecturer and economist at the University of Ghana Business School. It tightened at its last meeting to 'mop up any excess liquidity, so now the central bank action going forward may not readily reduce the monetary policy rate yet because there might still be some threats to inflation coming from the hikes in utility prices,' she said before the data release. The Bank of Ghana may also be reluctant to ease policy as 'easier monetary conditions could rekindle inflationary pressures,' said Mark Bohlund, a senior credit analyst at REDD Intelligence. Cuts may be on the horizon later in the year if the disinflation process continues. Governor Johnson Asiama said at the March meeting that as the monetary authority sees 'the next readings of inflation and we see declines, the committee will reassess the scope for a gradual easing in the policy stance.' Price growth in the world's second-largest cocoa grower has been above 10% — the upper limit of the central bank's target band — since September 2021 as a debt crisis led to a plunge in the cedi, making imports more costly. The MPC expects inflation to slow to about 16% by the end of this year and return to the 6%-10% band by the second quarter of 2026. The International Monetary Fund also expects inflation to slow further because of the government's pledge to curb rising living costs and support the cedi with fiscal adjustments. 'It makes us very confident that inflation is going to go down in the next few months toward the program objectives,' Stéphane Roudet, IMF's mission chief to Ghana, said in Washington in April.
