Nigeria: Ghana Cedi Worst Performing Currency in the World as Naira Also Struggles
In September, the Hanke Currency Watchlist ranked the Cedi – along with the Nigerian naira – as one of Africa’s worst performing currencies in 2022.
Ghanaian currency, Cedibecame the worst performing currency in the world after losing 45.1% of its value to the US dollar in 2022.
The cedi depreciated 3.3% on Monday, down 11.2750 to the dollar in the Ghanaian capital, in response to government talks with the International Monetary Fund (IMF) that could involve debt restructuring.
A Bloomberg report said the cedi’s poor performance against the dollar made it the worst of the 148 currencies tracked.
Ghanaian monetary authorities are in formal negotiations with the IMF for an extended credit facility as the West African country hopes to receive up to $3 billion in loans over three years in a bid to stabilize the balance of trade. payments.
With this drop, the Ghanaian currency overtook the losses of the Sri Lankan rupee, which has fallen nearly 45% against the US dollar this year amid socio-economic difficulties.
Ghana recently began talks with the IMF for a bailout package aimed at restoring macroeconomic stability as spiraling inflation sparked street protests against price hikes, taxes and other levies.
Bloomberg reports that foreign investors’ holdings of Ghanaian government domestic and corporate bonds fell 12.3% at the end of August, with the country’s domestic bonds currently trading at an average yield of 41%. 9%, the highest in emerging markets.
In September, the Hanke Currency Watchlist listed the Cedi – along with the Nigerian naira – as one of the worst performing currencies in Africa in 2022. According to Jean Hankeprofessor of applied economics at Johns Hopkins University, currencies have suffered massive devaluations against the US dollar since January 2020.
While the Cedi ranked fifth on the list, the Nigerian naira ranked 4th in Africa and 11th globally, as the value of the currency is believed to have depreciated 48.87% against the US dollar since January. 2020.
On Monday, the naira appreciated slightly against the dollar at the investors and exporters window, trading at 441.25 naira. In the parallel market, it traded on average at N742/$1 compared to N731/$1 recorded in the previous trading session.