The Ghanaian cedi has rallied, making it the world’s best performer against the US dollar this week. However, the country still faces the worst economic crisis in a generation, fomented by debt, according to US media.
Over the past five days, the cedi, which lost more than 50% of its value to the US dollar this year, rose 10%, marking its most growth since October. The cedi’s exchange rate per US dollar increased from 14.10 cedis per $1 on Monday, December 3, to less than 12.9 cedis per $1 as of Friday, December 9.
The cedi growth comes as the Ghanaian government is making efforts to restructure the country’s general debt, which is valued at 467.4 billion cedis ($37.4 billion), by putting forward a plan to swap about 137.3 billion Ghana cedis ($10.5 billion) in local bonds for new ones, while seeking help from the International Monetary Fund (IMF) to restructure external debt.
Commenting on the notable growth of the Ghanaian cedi, Simon Quijano-Evans, the chief economist at Gemcorp Capital Management Ltd. in London, was cited by US media as saying that the achievement was “a combination of a somewhat more hawkish central bank, some progress on the restructuring front and a bit of buying the news.”
Meanwhile, global economics expert Charles Robertson said the cedi's good performance was "not that surprising" since the currency has lost “more than 30% undervalued versus its 25-year history last week.”
A delegation from the IMF is visiting Accra to agree on a loan deal. In July, the Ghanaian government announced that it was looking at a three-year IMF program potentially worth between $2 billion and $3 billion.