By John Ikani
A recent currency performance ranking by Bloomberg has classified the Cedi as the worst-performing currency across the globe.
Bloomberg tracked the performance of 150 currencies in the world and the Cedi placed last in terms of performance since the beginning of the year.
According to Bloomberg, the Ghana Cedi is currently in tatters, haven depreciated by over GHC2 in the last week, compounding the ever-depreciating currency against major foreign currencies.
“The Cedi fell 1.6% on Tuesday, August 16, extending this year’s slump to 35% and making it the world’s worst performer among 150 currencies tracked, after bankrupt Sri Lanka’s rupee,” Bloomberg indicated.
Ratings from Fitch and S&P also saw the Cedi rating falling further to junk this month.
Macro indices
In less than 8 months, the Cedi has come under intense exchange rate pressure due to its continuous depreciation to some major international currencies such as the Dollar, Pound and Euro.
According to data put out by the Bank of Ghana, the Cedi began the year at $1.00 to GH¢6.02.
Just a month ago, one could exchange $1.00 for GH¢7.43, and in less than 20 days, traders needed an average of GH¢9.37 to buy $1.00.
This means the Cedi has lost most than GH¢3.30 of its value to the dollar in less done 8 months.
Remedy
To address the exchange rate problems, the Monetary Policy Committee met on Wednesday to “review recent developments in the economy,” according to a statement released by Bank of Ghana.
That’s after it left borrowing costs unchanged at 19% last month on expectations that inflation may be leveling off and to allow a cumulative 550 basis points of rate hikes since November to filter through the economy.
The central bank is the second in sub-Saharan Africa after the Bank of Uganda to hold an emergency meeting since Russia’s war with Ukraine erupted in February.
The meeting comes after regulators announced Monday that water and electricity tariffs will rise 22% and 27% respectively from next month.
