In just the first 17 days of the new year, the Ghanaian currency reportedly depreciated by 12.7%, making it the second worst-performing among Sub-Saharan Africa’s top 15 currencies. While one U.S. dollar bought 13.10 units of the cedi on the parallel market, according to the latest Bank of Ghana data, one greenback buys around 10.36 units of the local currency.
The Cedi’s Short-Lived Resurgence
After ending 2022 as one of the world’s worst-performing currencies, the Ghanaian currency is already one of two in Sub-Saharan Africa’s top 15 currencies that depreciated by double-digit figures within the first 17 days of the new year, a report has said. The Egyptian pound, which depreciated by 16.5% during the same period, is the only currency among Sub-Saharan Africa’s top 15 that has depreciated faster than the cedi.
Although the Ghanaian cedi’s year-to-date 12.7% drop is still lower than that of the whole of 2022 (38.86%), the latest depreciation suggests that the currency’s resurgence that started in late 2022 has dissipated.
As reported by Bitcoin.com News in mid-December 2022, the cedi rallied from around GHS14:$1 to under 9:1 in just four days. The currency’s revival had been fueled by reports suggesting the Ghanaian government had secured a $3 billion loan from the International Monetary Fund (IMF). Ghana needs the loan to help it stabilize its economy.
In addition to the IMF loan package, Ghana, one of Africa’s top gold producers, hopes to ease the pressure on the cedi through the recently launched gold-for-oil scheme.
Bank of Ghana Exchange Rates pic.twitter.com/AGI7GfW5M3
— Bank of Ghana (@thebankofghana) January 20, 2023
However, the cedi’s plunge to around GHS13.10:$1 on the forex parallel market suggests that neither the IMF loan nor the barter scheme can halt the currency’s fall. Meanwhile, at the time of writing, the Bank of Ghana’s data showed that one U.S. dollar bought GHS10.36 on the official foreign exchange market.
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Terence Zimwara is a Zimbabwe award-winning journalist, author and writer. He has written extensively about the economic troubles of some African countries as well as how digital currencies can provide Africans with an escape route.
Image Credits: Shutterstock, Pixabay, Wiki Commons
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