This year, the Ghana cedi has lost 35% of its value against the US dollar, making it the world’s second worst-performing currency after the Sri Lankan rupee.
According to Bloomberg’s currency performance ranking, the cedi fell 1.1 percent on Wednesday to trade around GH9/$, extending its weekly drop to 5.2 percent — the worst drop since March 29, 2019.
“As the monetary policy committee met, a new set of data indicated that inflation could accelerate further in the coming months,” according to the report.
“Ghana’s producer prices rose 41.2 percent in July, the fastest increase in eight years.”
The Ghana cedi, like the naira, has been consistently depreciating against major trading currencies, particularly the US dollar, since the beginning of the year.
According to Bloomberg, the currency’s fall is due to demand for forex exceeding supply during a period when Ghana’s high debts and low investor confidence have made access to the international capital market for borrowing impossible.
The Bank of Ghana (BOG) raised its lending rate (MPR) to 22 percent on Wednesday in an effort to reduce inflationary pressures and halt the cedi’s depreciation against the US dollar.
In July, the Ghanaian government initiated talks with the International Monetary Fund (IMF) to support its economic programs as part of efforts to accelerate the country’s recovery from the pandemic’s challenges.
Due to the economic downturn, hundreds of citizens took to the streets to protest price increases, a tax on electronic payments, and other levies.
