Ghana Cedi Now World’s Worst-Performing Currency – Bloomberg

Bloomberg data showed the cedi depreciated by 13.4% against the US dollar in the current quarter, the steepest fall worldwide. This erases part of the 50% gain the currency recorded between April and June, when strong gold prices bolstered investor confidence.

In April, the cedi’s rally had eased inflationary pressures, helping consumer inflation drop to 21.2% — its lowest in eight months at the time.

However, a surge in demand for dollars by businesses paying for imports has piled pressure on the local currency. Ghana’s import-dependent economy typically sees dollar demand rise toward the year-end, as companies stock up ahead of the Christmas season.

The strain has been worsened by the Bank of Ghana’s limited supply of foreign exchange despite the country’s gross international reserves rising to $11.1 billion at the end of June, the highest in three years.

Mr. Hamza Adam, Head of Market-Risk Management at UMB Bank, told Bloomberg that banks submitting dollar requests on behalf of clients last week received only half of what they needed. “This week the central bank is trying to meet all demand,” he said.

Despite the recent slump, the cedi has still gained about 23% against the dollar so far this year. As of 1:50 a.m. on September 3, it traded 0.1% weaker at GH¢11.9507 per dollar.

Bloomberg’s data for the third quarter showed the following currency losses:• Ethiopian birr: -4.1%• Chilean peso: -4.3%• Dominican Republic peso: -5.6%• Botswana pula: -7.7%• Argentine peso: -11.5%• Ghanaian cedi: -13.4%

In a response to Bloomberg, the Bank of Ghana said its priority was to maintain stability within a “reasonable range.”“Our role is to ensure fluctuations remain orderly, that they reflect fundamentals, and that they do not undermine confidence in the broader economy,” the central bank stated.

The cedi’s struggles come at a critical time for Ghana’s economy, as policymakers grapple with balancing import demands, inflationary pressures, and the need to sustain investor confidence.