Cedi declines by about 20% to US Dollar – Report

Cedi struggles against US Dollar

Bank of Ghana hikes policy rate to 17%

Credit rating agencies downgrade Ghana’s credit worthiness

The value of the Ghana cedi has declined by about 20 percent to the US dollar so far this year, according to a report by nasdaq.com

The portal said the depreciation of the local currency makes it the fastest in decades.

“The Ghana cedi has weakened by about 20% against the dollar this year, making it the second-weakest currency after the Russian rouble in a list of some 20 emerging market units tracked by Reuters,” the report said.

Since the beginning of this year, the Ghana cedi has suffered persistent depreciation against major trading currencies. Within the first week of March, the rate of the cedi depreciation doubled to 14.21 percent to the US Dollar.

Prior to this, the cedi depreciated by about 7.60 percent to the US Dollar from the beginning of January this year to February 25, 2022.

The free fall in the value of the cedi has also ranked it as the worst-performing currency according to a 15-nation ranking of African currencies.

Market analysts have however attributed the cedi’s decline to a number of risk factors associated with Ghana’s economy. These include high interest payments, revenue generation constraints among others.

The cedi's woes have been of concern to investors on the international capital markets who have signaled uncertainty about Ghana's economic outlook and prospects.

Meanwhile, Ghana's total public debt stands at GH¢351.8 billion in December 2021, according to central bank figures.

This represents about 80.1 percent of Ghana’s Gross Domestic Product.

The central bank on Monday March 21, 2022 announced a hike in its monetary policy rate to 17 percent from an earlier 14.5 percent.