The Ghanaian cedi has become the worst-performing currency in the world after it lost 45.1 percent of its value to the US dollar in 2022.
The cedi depreciated 3.3 percent on Monday, down 11.2750 per dollar in the Ghanaian capital city, in response to the government’s talks with the International Monetary Fund (IMF) that may involve debt restructuring.
A Bloomberg report said the cedi’s poor performance against the dollar makes it the worst among 148 currencies tracked.
The Ghanaian monetary authorities are in formal negotiations with the IMF for an extended credit facility as the West African country hopes to receive up to $3 billion in loans over three years in a bid to stabilize balance of payments.
With the slide, the Ghanaian currency has overtaken the losses of the Sri Lankan rupee, which slumped nearly 45% against the United States’ dollar this year amid socio-economic challenges.
Ghana recently began talks with the IMF for a bailout programme to restore macro-economic stability as spiraling inflation triggered street protests against price hikes, taxes and other levies.
According to reports, holdings by foreign investors in the Ghanaian government’s domestic and corporate bonds fell to 12.3% at the end of August, with the nation’s domestic bonds currently trading at an average yield of 41.9%, the highest in emerging markets.
In September, the Hanke Currency Watchlist listed the Cedi—along with the Nigerian naira—as one of the worst-performing currencies in Africa in 2022. According to John Hanke, a professor of Applied Economics at the John Hopkins University, the currencies suffered massive devaluations against the US dollar since January 2020.
While the Cedi ranked fifth on the list, the Nigerian naira ranked 4th on in Africa and 11th globally as the currency’s value was said to have depreciated against the USD by 48.87% since Jan 2020.