Ghana cedi soars in value, now exchanges for 7 cedis to a dollar after 54 per cent drop

The Ghana Cedi, once listed as the world's worst-performing currency in October, turned the table and became the world's best-performing currency.

The Cedi regained 61 per cent of its value against major foreign trading currencies after a 54 per cent drop in value, a November report showed.

The recent development came as monetary policies enacted by Ghana's Central Bank, including the decision to restrict foreign exchange to import medical products.

The recent performance is also due to the country's plan to reorganise local debts initiated by the country's finance minister, Ken Offori-Atta.

The interbank rates used by commercial banks in Ghana for transactions published by the country's central bank, the Bank of Ghana goes for 7.99 (buying) and 8.0 (selling) to one dollar.

Business Insider reports that the buying and selling rate of the pounds is 9.72 and 9.73 respectively. The euros exchanged for 8.49 and 8.48 respectively.

As a result of the development, the director of Financial Markets at the Bank of Ghana, Stephen Opata, said that Ghana's currency appreciation is due to the prudent management of liquidity in the financial system.

Opata said the country also saw an increase in the policy rate to 27 per cent, contributing to the currency's good run.

Opata said: "The continuous hike in the policy rate will also ensure that excess cedi can be used to purchase government bonds and other securities, despite current concerns with the proposed debt exchange program." He added.

Financial analysts have created a discussion around sustainability. It is not enough that the Cedi has regained value, the authorities have to ensure that it remains stable.

According to the analysts, the stability of the Cedi will not be based on the supply of the currency, but on the success of the ongoing economic reforms in the country.

Recall that Legit.ng reported that while Nigerians are crying over the shambolic performance of their local currency, the naira exchanging for N741 per dollar on Monday, October 17, 2022, their West African neighbour, Ghana's cedi, emerged as the worst-performing currency in the world.

Bloomberg reports that Ghana's cedi plummeted to become the world's worst-performing currency in 2022 as investors continue to pump foreign currencies into the country as it inches closer to a deal with the International Monetary Fund (IMF).

The cedi fell to as much as 3.3 per cent on Monday, October 17, 2022, to exchange for 11.2750 cedis per dollar as of Monday afternoon in the capital, Accra.