THE GHANA Cedi has taken a commanding lead, occupying the slot of the world’s best performing currency against the dollar, Bloomberg has reported.
According to the media company headquartered in Midtown Manhattan, USA, the turnaround for the cedi, which had lost half of its value this year to occupy the bottom slot, is the optimism that Ghana is moving closer to unlocking a $3 billion loan from the International Monetary Fund (IMF).
The report said the cedi rallied 10 per cent in the past five days [now eight days], which is seen as the biggest advance among about 150 currencies that were tracked by Bloomberg.
The report read, “The currency was the cheapest in Africa, more than 30% undervalued versus its 25-year history last week, so some rebound after the huge fall recently isn’t that surprising,” said Charles Robertson, the global chief economist at Renaissance Capital Limited in London. “Also we have the IMF in town, which should pave the way for dollar support.”
It indicated that the gains came on the wheels of the recent launch of the domestic debt exchange programme announcement by the Finance Minister, Ken Ofori-Atta.
He told the nation the government had finished its debt sustainability analysis, and came up with the debt exchange programme to address the domestic debt problem in the country.
According to the Finance Minister, local bonds will be exchanged for new ones maturing in 2027, 2029, 2032, and 2037, and their annual coupon will be set at 0% in 2023, 5% in 2024, and 10% from 2025 until maturity.
The debt restructuring programme is needed to put Ghana’s debt on a sustainable path, which is a requirement to secure the $3 billion IMF loan.
The cedi advanced Friday to 12.9648 per dollar, and Bloomberg said this is the strongest level since October on a closing basis.
Optimism on the cedi, “is a combination of a somewhat more hawkish central bank, some progress on the restructuring front and a bit of buying the news,” said Simon Quijano-Evans, the chief economist at Gemcorp Capital Management Limited in London.
Other emerging currencies that outperformed this week include the Vietnamese dong, Chilean peso, Costa Rican colon and Chinese yuan.
Meanwhile, the Ghana Union of Traders Association (GUTA) has praised the appreciation of the cedi, hoping to see further and continuous appreciation, while envisaging that the economy will turn around in the shortest possible time.
President of GUTA, Dr. Joseph Obeng, stated, “As the value of the cedi begins to appreciate, GUTA wishes to appeal to members of the business community to also adjust prices of goods and services accordingly, to make the consuming public feel the impact of this positive trend.”
BY Ernest Kofi Adu