The Ghana cedi lost 40.05% in value to the US dollar in the first nine months of 2022, ranking it as the second worst performing currency in the world in the 147th position, according to Bloomberg.
This decline in the local currency against the American currency is the worst in over three decades.
The performance of the cedi also ranked it as the worst among 30 top-performing currencies on the African continent.
In the last three months, the local currency lost almost 21% in value to the world’s most important currency.
The situation was worst in the month of August 2022.
The cedi’s woes this year has been complicated by the poor fiscal state of the economy, causing a downgrade of the country’s credit rating by all the three top rating agencies in the world.
This has as a result led to liquidation of some investments of Government of Ghana bonds by investors, further worsening the situation.
Cocoa Syndication Loan to temporarily slowdown cedi depreciation
However, the expected $1.3 billion Cocoa Syndication Loan of which the first tranche of inflows may come this month will help slow down the rate of depreciation of the cedi significantly in the short term.
Management of the Ghana Cocoa Board is expected to sign the historic loan with some international banks to facilitate purchases of cocoa beans from farmers for the 2022/2023 crop season.
Again, the expected economic programme that the government is seeking from the International Monetary Fund may halt the rapid fall of the local currency in the medium term.
Meanwhile, the Sri Lanka Rupee is the worst performing currency in the world at the 148th position.
Cedi registered unprecedented weekly decline in trading as dollar demand surges
Last week, the cedi registered a record weekly decline in trading in the interbank market after sovereign debt downgrade by rating agency, Fitch.
Analysts say the local unit posted heavy losses on the interbank market as unrelenting foreign exchange demand continued to weigh down the cedi against the dollar.
Cedi loses 16.86% value to dollar in first half-year of 2022
The cedi lost 16.86% in value to the dollar in the first half of 2022 on the interbank market but over 20% on the retail forex market.