According to Bloomberg, the Ghana cedi lost 40.05% of its value against the US dollar in the first nine months of 2022, ranking it as the world’s 147th worst performing currency.
This is the worst decline in the local currency against the US dollar in over three decades.
The cedi’s performance also ranked it last among 30 top-performing currencies on the African continent.
In the last three months, the local currency has lost nearly 21% of its value in relation to the world’s most important currency.
The situation was the worst in August 2022.
The cedi’s woes this year have been exacerbated by the economy’s poor fiscal state, resulting in a downgrade of the country’s credit rating by all three of the world’s top rating agencies.
As a result, some investors have liquidated their investments in Government of Ghana bonds, worsening the situation.
Cocoa Syndication Loan to temporarily slowdown cedi depreciation
However, the expected $1.3 billion Cocoa Syndication Loan, with the first tranche of inflows expected this month, will significantly slow the rate of depreciation of the cedi in the short term.
The Ghana Cocoa Board’s management is expected to sign a historic loan agreement with some international banks to facilitate the purchase of cocoa beans from farmers for the 2022/2023 crop season.
Also read: Bright Simons: Ghanaian cedi has declined drastically
Again, the expected economic program sought by the government from the International Monetary Fund may, in the medium term, halt the rapid decline of the local currency.
Meanwhile, the Sri Lanka Rupee is the world’s worst-performing currency, ranking 148th.
Cedi registered an unprecedented weekly decline in trading as dollar demand surges
Following a downgrade of sovereign debt by rating agency Fitch, the cedi experienced a record weekly decline in interbank trading last week.
According to analysts, the local unit suffered significant losses in the interbank market as unrelenting foreign exchange demand weighed down the cedi against the dollar.
Cedi loses 16.86% of value to the dollar in the first half-year of 2022
The cedi lost 16.86% in value to the dollar in the first half of 2022 on the interbank market but over 20% on the retail forex market.
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