• The Ghana cedi has become the worst performing currency in the world after the Sri Lankan rupee
  • The West African country’s currency has lost around 45% of its value, trading at 11.2750 cedis to the dollar
  • Reports say the cedi has been in trouble since the country planned to launch debt relief talks with the IMF

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As Nigerians mourn the chaotic performance of their local currency, the naira trading at 741 naira to the dollar on Monday, October 17, 2022, their West African neighbour, the Ghana cedi, has become the worst performing currency in the world.

Bloomberg reports that Ghana’s cedi has fallen to become the world’s worst performing currency in 2022 as investors continue to pump foreign currency into the country as it nears a deal with the International Monetary Fund ( IMF).

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Cedi, Ghana, Naira, World
Ghana’s currency breaks records as worst performing currency in the worldCredit: Klaus Vedfelt
Source: Getty Images

Currency trading at lowest on record

The cedi fell 3.3% on Monday, October 17, 2023, to trade at 11.2750 cedis to the dollar on Monday afternoon in the capital, Accra.

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This year, the cedi has lost more than 45% of its value, the highest among the 148 currencies tracked by Bloomberg.

The cedi’s fall accelerated last month when Ghana began formal talks with the IMF to extend its loan.

The West African country hopes to receive around $3 billion in loans over three years as part of an agreement to strengthen its finances and support the balance of payments.

The cocoa-producing country has asked for help from the IMF after losing access to the Eurobond market this year and due to policies and a massive sale of its international bonds.

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Investor demand for US Treasuries to hold Ghana’s debt rose to 2,669 basis points.

Country races to IMF for help as external reserves plummet

The country asked for help from the IMF after losing access to the Eurobond market this year. Local policies, including cutting discretionary spending by up to 30% in 2022, have failed to stem a sell-off in its international bonds. The premium investors are demanding on US Treasuries to hold Ghana’s debt has widened to 2,669 basis points.

Foreign and other investors’ holdings of outstanding domestic government and corporate bonds fell to 12.3% at the end of August, the lowest on record, from a high of 17.3% in April , according to data from Central Security Depository Ghana Ltd.

The country’s domestic bonds sell for an average yield of 41.9%, the highest in developing markets.

Ghana’s gross external reserves fell to $6.6 billion in September, which could only cover 2.9 months of imports, down from $10.7 billion a year earlier.

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The cedi has overtaken the Sri Lankan rupee, which has fallen nearly 45% this year as the country also seeks an IMF loan following a default.

Naira breaks record, suffers worst depreciation against US dollar in official market, CBN advises Nigerians

Remind that Legit.ng reported that Nigeria’s currency, the Naira, has continued to decline against the US dollar, and is now officially at an all-time low in the official market.

According to FMDQsecurities, where the naira is officially traded, investors and exporters paid 441.17 naira per dollar on Tuesday, October 11, 2022.

This is the first time in history that Nigerians will pay over N440 to buy a dollar at the official rate.

Source: Legit.ng