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Ghana's Cedi Gets Central-Bank Lifeline
BLOOMBERG - Ghana's Cedi Gets Central-Bank Lifeline. Ghana's cedi has weakened every year since at least 1994. Now the central bank appears to have drawn a line in the sand, ready to intervene should the currency slip out of the tight range itâs held since May.
That means the currency probably wonât weaken much beyond the 2.1% decline itâs posted this year - which would be its best performance since 2006, when it dropped 1.4%. The cedi has slumped 18.8% a year on average over the past two-and-a-half decades, according to data compiled by Bloomberg.
âThe central bank has been coming onto the market to match dollar demand in the last couple of months,â Edem Kporku, senior research analyst at Apakan Securities Ltd., said by phone. âThey are trying to maintain the currency at a fairly stable trading range.â
Ghana's Cedi Gets Central-Bank Lifeline. In addition to the Eurobond, the country received a $1 billion emergency loan from the International Monetary Fund and a $100 million package from the World Bank after the coronavirus struck. The central bank concluded a $1 billion repo arrangement with the U.S. Federal Reserve, helping sustain international reserves that eased to $9.2 billion in June from $9.9 billion in March.
The regulator sells about $40 million each month on the spot market and $50 million on the forward market, according to Anthony Asare, head of treasury at GCB Bank Ltd. Though the amounts arenât large, âthese interventions reduce speculation and give direction to the market,â he said.
The cedi was little changed at 5.7828 per dollar on Friday. Itâs been trading in a range around that level since rebounding from a decline to a record 6.0401 in the wake of the Covid-19 sell-off in April. While risks, including elections in the U.S. and Ghana, may weigh on the cedi, itâs unlikely the central bank will allow sustained weakness, said Neville Mandimika, a Johannesburg-based economist at Rand Merchant Bank Ltd.
Market Intervention
âAny weakness is likely going to invite the Bank of Ghana to sell dollars into the market to stabilize it,â Mandimika said.
Three-month forward contracts on the currency traded at 6.0150 per dollar at 12:10 p.m. in the capital, Accra.
U.S. heads to the polls in November while Ghana follows in the month after. Ahead of the previous election in 2016, the cedi lost 11% to the U.S. currency. President Nana Akufo-Addo of the NPP will face off with NDCâs John Mahama, in a third consecutive contest.
A $1.3 billion inflow from the Ghana Cocoa Boardâs syndicated loans for cocoa purchases is expected in October, and that will top up the central bankâs reserves, Courage Martey, an economist at Databank Group, said by phone.
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Visa and PayPal Expand Partnership
Visa and PayPal Expand Partnership
Visa and PayPal Expand Partnership as COVID-19 drives digital payments shift, consumers and small businesses can move money quickly through PayPal and Visa Direct capabilities.
SAN FRANCISCO--(BUSINESS WIRE)--Whether sending money to a family member in another country or obtaining same-day access to earnings, fast and secure digital payments have become an essential part of how the world pays and gets paid in the wake of COVID-19. Visa Inc. (NYSE:V) and PayPal (NASDAQ: PYPL) today shared details about an extension of their global partnership, which will expand real-time access to funds for consumers and small businesses that are sending or receiving money via PayPal, Venmo or Xoom. This collaboration expands PayPalâs Instant Transfer service, which leverages Visa Direct for real-time1 payment capabilities, to global markets and enables fast domestic and cross-border digital payments.
The global partnership will also enable PayPal to extend global white label Visa Direct payout services through PayPal and its Braintree, Hyperwallet and iZettle product solutions. This expansion follows the successful launch of the Instant Transfer service across North America and other markets in Asia Pacific and Europe.
âSending money to loved ones or giving small businesses real-time access to earnings is critical during these challenging times,â said Jack Forestell, CPO, Visa. âBy partnering with PayPal on a global scale, we are bringing together two trusted brands to provide hundreds of millions of consumers and small businesses globally with quick and secure payment options that can help them maintain financial stability.â
Person-to-person (P2P) payments using Visa Direct, Visaâs real-time push payments platform, experienced an almost 80 percent increase in transactions in the U.S. during Q3 20202. Eligible PayPal customers can pay and get paid by friends, family and businesses, and move money quickly from their PayPal, Xoom and Venmo accounts via Visa Direct to their eligible Visa cards.
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WorldRemit to Acquire Sendwave in $500 Million Payments Deal
WorldRemit acquires Sendwave.
WorldRemit Ltd., a U.K. online money transfer company, has agreed to buy Africa-focused, app-based remittance firm Sendwave as the global pandemic intensifies demand for digital banking.
WorldRemit acquires Sendwave, the cash and stock deal is worth more than $500 million, according to a person with knowledge of the matter. The combined company will be valued at more than $1.5 billion, according to one of the people, who asked not to be identified as the information is private.
WorldRemit Chief Executive Officer Breon Corcoran said the company is betting that the pandemic-fueled shift to digital banking will become permanent. âWhat we saw immediately after lockdown orders is a real acceleration toward digital,â with the rate of new account activations more than doubling this year, he said in an interview.
âThis is a fast-growing part of the broader payments space and increasingly our businesses will be viewed as more akin to Venmo or Paypal,â he said.
The Sendwave acquisition will help bolster WorldRemitâs coverage of Africa. Sendwave, backed by startup incubator Y Combinator, allows customers in North America and Europe to send instant payments to friends and relatives in countries including Ghana, Nigeria, Senegal and East Africa. Sendwave will continue to operate as an independent business and retain its management, employees and key partners, the companies said.
Founded in 2010 by Ismail Ahmed, a former London student who had struggled to send money home to Somalia, WorldRemitâs investors include Accel and TCV, early backers of Facebook Inc.
Payments Decline
While the pandemic has pushed more people to bank digitally, they are sending less money overseas, according to the World Bank. The organization is predicting a 20% decline in global remittances this year because of the economic crisis stemming from the pandemic. Decreasing wages and employment opportunities for migrant workers who typically send money back to family and friends are projected to drag down remittances to low and middle-income countries to $445 billion this year. The World Bank estimates that figure will recover to $470 billion next year.
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