In spite of positive developments in the U.S, the dollar closed positive on the international forex front but lost against the local currency in the domestic market due to the supply boost to the cedi.
The cedi thus appreciated by 0.30 per cent to trade at GHS4.39 per dollar, representing a year-to-date depreciation of 4.62 percent.
The 19-bloc currency was weighed by post-election uncertainties and low macro-economic data readings from the Eurozone.
The difficulties surrounding Angela Merkel in forming a coalition government after her win in the recent general election in Germany dimmed investors sentiment and that sparked series of profit taking activities among investors.
These factors took the shine of the 19-bloc currency, causing it to lose 1.25 per cent against the local currency.
The cedi thus traded at GHS5.9 per euro, reducing its year-to-date depreciation to 13.47 per ent.
UK’s Brexit secretary – Barnier’s comment that a considerable progress is made in connection with the Brexit negotiation, an indication that a conclusion may be achieved sooner, buoyed market sentiment and stimulated demand for the pound sterling among currency traders.
The surprise boost of the pound was also by upbeat retail sales data which settled at 42 points in September from a negative 10 points in August.
In spite of the pound’s positive outlook, the currency failed to steady against the local currency, which was supported by the recent inflow.
The cedi thus appreciated by 1.61 percent to trade at GHS5.19 per pound, representing a year-to-date depreciation of 17.07 percent.
At the end of September 29 auction, the yields on the short-dated Treasury Securities eased marginally.
Yields on both the 91-Day and 182-Day T-Bills softened by nine basepoints (bps) each to settle at 13.15 percent and 13.97 percent, respectively. The yields on all other treasury securities remained unchanged.
Out of the total of GHS914.29 million tendered, the government accepted GHS878.59 million worth of bids.
This was 9.23 percent lower than the week’s target of GHS968 million.
Comparatively, the short-term securities accounted for most of the purchases made, with the 91-day and 182-day Treasury Securities constituting 87.92 percent of the total bids accepted.
Target for the next auction is estimated to be GHS676 million for both the 91-day and 182-day Treasury Securities and GHS200 million for the Two-Year note.
The regularity of the yield curve was maintained amidst the rate adjustment observed on the Treasury Securities.
The normality of the yield curve, coupled with recent upbeat economic data, including consumer sentiment, is expected to brighten the economic fortunes of the country through a deepening of the private sector participation in economic growth.
Credit - GraphicBusiness