Cedi lost 40.05% in value to the US dollar in nine months of 2022, ranking it as the second worst performing currency in the world in the 147th position, according to Bloomberg.
This decline in Cedis against the American dollar is the worst in over three decades.
The cedi’s performance is so poor that it ranked as the worst currency out of 30 top-performing currencies in Africa.
Cedis has lost almost 21% of its value in the last three months when compared to the world’s most important currency.
The situation was at its worst in the month of August 2022.
The cedi’s decline this year has been exacerbated by the poor fiscal state of the economy, leading to a downgrade of the country’s credit rating by all three major rating agencies.
This has led to the liquidation of some investments of Government of Ghana bonds by investors, further worsening the situation.
However, the expected $1.3 billion Cocoa Syndication Loan of which the first tranche of inflows may come this month will help slow down the rate of depreciation of the cedi significantly in the short term.
Management of the Ghana Cocoa Board is expected to sign the historic loan with some international banks to facilitate purchases of cocoa beans from farmers for the 2022/2023 crop season.
The government’s expected economic program from the International Monetary Fund may help to slow the rapid decline of the local currency in the medium term.
The Sri Lankan Rupee is the 148th worst performing currency in the world.
The cedi registered a record weekly decline in trading in the interbank market last week after sovereign debt downgrade by rating agency, Fitch.
Bank analysts say that the local unit, the cedi, posted heavy losses on the interbank market as unrelenting demand for foreign exchange continued to weigh down the cedi against the dollar.
In the first half of 2022, the cedi lost 16.86% of its value in relation to the dollar on the interbank market. However, this number jumps to over 20% when considering the retail forex market.
