• The Ghanaian cedi is the second worst-performing among Sub-Saharan Africa’s top 15 currencies, depreciating by 12.7% in just the first 17 days of the new year.
• This follows the Ghanaian cedi ending 2022 as one of the world’s worst-performing currencies, with a 38.86% depreciation.
• The Ghanaian government is hoping to ease pressure on the cedi through the gold-for-oil scheme and a $3 billion loan from the International Monetary Fund.
The Ghanaian cedi is facing a difficult start to the new year, with the currency depreciating by 12.7% in just the first 17 days of the year, making it the second worst-performing among Sub-Saharan Africa’s top 15 currencies. This follows the Ghanaian cedi ending 2022 as one of the world’s worst-performing currencies, with a 38.86% depreciation.
The latest Bank of Ghana data shows that while one U.S. dollar bought 13.10 units of the cedi on the parallel market, today one greenback buys around 10.36 units of the local currency. This sudden slump indicates that the currency’s resurgence that started in late 2022 has dissipated.
The Ghanaian government is hoping to ease the pressure on the cedi through the recently launched gold-for-oil scheme and a $3 billion loan from the International Monetary Fund (IMF). The IMF loan package will help Ghana to stabilize its economy and the gold-for-oil scheme will also help to ease the burden on the nation’s currency.
Aside from the IMF loan package and gold-for-oil scheme, the Ghanaian government is also looking to introduce fiscal and monetary policies to help stabilize the cedi. However, it remains to be seen if these policies will be enough to curb the current devaluation of the cedi and stop the currency from further depreciation in the coming months.