Cedi crisis: Ghana’s currency plummets 12.7% in just 17 days

Cedi crisis: Ghana’s currency plummets 12.7% in just 17 days

The Ghana cedi has depreciated by 12.7% against the US dollar in the first 17 days of 2023, making it the second weakest currency among the top 15 currencies in Sub-Saharan Africa. The Egyptian pound currently holds the title of the weakest currency in the region.

The local currency is currently being sold at around GHS 13.10 pesewas to the dollar on the forex market, and is also experiencing weakness against the Euro and British pound, selling at GHS 13.70 and ¢15, respectively.

The Bank of Ghana has quoted the dollar at GHS 10.34, but the country’s Net Foreign Assets are currently in a negative position, further compounding the cedi’s performance.

The Governor of the Bank of Ghana, Dr. Ernest Addison, has attributed the depreciation of the cedi to pressure on the Ghanaian economy.

He is however optimistic that the government’s gold-for-oil policy will help reduce the foreign exchange pressures on the economy and stabilize the local currency.

The Ghana cedi ended 2022 as the second weakest currency on the African continent with a year-to-date loss of 38.86% to the US dollar, according to Bloomberg. The country’s economy is facing challenges such as high debt levels, rising inflation, and increasing cost of living standards.

Dr. Addison is hopeful that the rapid depreciation of the cedi experienced last year will not occur this year, but time will tell if the government’s policies will be effective in stabilizing the local currency and improving the country’s economic situation.

AFRICAN CURRENCIES PERFORMANCE