The Ghana cedi has continued to demonstrate a strong performance against the US dollar in recent weeks, with the local currency improving in value against the American currency on March 23, 2023.
This comes as the cedi started the week selling at GHS 12.60 to one American greenback, but now going for GHS 12.40, narrowing its year-to-date loss to the US dollar to approximately 17%.
This impressive performance has been attributed, in part, to the recent upgrade of Ghana’s credit rating by Fitch Ratings agency.
Ghana’s credit rating has been upgraded to ‘CCC’ from ‘RD’, and Fitch attributes the upgrade to the completion of the Domestic Debt Exchange Programme by Ghana in February 2023 and the resumption in payments on local currency bonds that cures the default on LC debt.
This positive announcement has boosted market sentiments and reduced demand for the dollar and other major foreign currencies.
Although the Ghana cedi is demonstrating a strong performance against the US dollar, it is still depreciating against other major foreign currencies.
At present, the cedi is going for GHS 14.90 and GHS 12.90 against the pound and the euro, respectively. This may indicate that the cedi is not experiencing a broad-based appreciation, but rather a relative improvement against the dollar.
Hope For The Ghanaian Currency As Finance Minister Engages In Bilateral Talks With China
The Finance Minister of Ghana, Mr. Ken Ofori-Atta and his team are currently engaged in negotiations with China regarding the restructuring of the $1.7 billion Ghana owes the Far East Giant. If successful, these negotiations could further impact the performance of the cedi against the dollar and other major foreign currencies.
Ghana’s engagements with China is expected to end on Friday 24th March, 2023. The Ghana delegation is made up of Technical Officials from the Ministry of Finance, Ministry of Foreign Affairs and the Bank of Ghana.
The team will engage representatives of the Chinese government and their counterparts from China’s Ministries of Finance, and Foreign Affairs as well as the Central Bank of China.
Mr. Ofori-Atta leads the team after attending a UNECA High Level meeting in Ethiopia, where he also engaged members of the Paris Club.
Looking forward, analysts predict a mixed performance for the cedi against the US dollar this week, following a marginal depreciation of 0.20% against the American currency last week. The outcome of these predictions remains to be seen, and the market will undoubtedly be watching closely to see how the cedi performs in the coming weeks.
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