Ghana’s Cedi Becomes World’s Worst Performing Currency
According to Bloomberg, Ghana’s Cedi depreciated as much as 3.3% taking its losses this year to more than 45%, the most among 148 currencies tracked by Bloomberg.
The currency has overtaken the losses of the Sri Lankan rupee, which recently slid nearly 45% against the greenback this year.
In the past two months, Ghana has been in formal negotiations with the International Monetary Fund for an extended credit facility with the hope of receiving $3bn in loans over three years to help aid the struggling economy but the IMF has been slow to yield to Ghana’s request.
The IMF has requested a debt sustainability plan, before lending the country its requested billion bailouts.
The West African country also lost access to the Eurobond market this year and as homegrown policies, including cutting 2022 discretionary expenditure by up to 30%, failed to stem a selloff in its international bonds. The premium investor’s demand to hold Ghana debt has now widened to 2,669 basis points.
More on the nation’s economy, indexes tracked by Bloomberg showed that Ghana’s domestic bonds traded at an average yield of 41.9%, the highest in emerging markets,
Ghana’s gross international reserves also declined to $6.6 billion in end-September, enough to cover only just under three months of imports.