The value of the local currency keeps strengthening against the US dollar and all the other major foreign currencies, few days after government announced a Debt Exchange Programme.
Checks by Joy Business at some foreign bureaus within the capital city of Accra has revealed that the local currency is going for an average of ¢13 to the US dollar. It may decline further to the ¢12 bracket by tomorrow if the trend continues.
A pound and euro is also selling at ¢15.90 and ¢13.15 respectively to the cedi.
It is unclear why the sudden improvement of the local currency, but some market analysts are attributing it to a weakening of the US dollar against global currencies and a successful launch of a debt restructuring programme.
The government is optimistic it will secure an IMF Staff-Level Agreement before the end of the year, and that will build investor confidence and strengthen the cedi further.
Some analysts stated a day after the launch of the Debt Exchange Programme that the Ghana cedi was likely to strengthen against the US dollar and other major foreign currencies amidst clarity on Ghana’s debt sustainability outlook.
The cedi’s good run in recent weeks reflects more of a US dollar weakening with some improved outlook around the cedi-US dollar supply balance heading into next year, an analyst with one of the leading investment bank told joy Business.
“Firstly, we’ve seen some sharp weakening of the US dollar against global currencies in recent weeks and this is showing in a sharp decline in the dollar index which has lost 6.6% since early November to date. The US dollar weakening has thus eased the pressure on emerging and frontier market currencies, including the Ghana cedi”.
Another analyst also said the discussions around the debt restructuring appears to be a favourable outlook for the cedi.
“If the domestic debt exchange programme becomes successful with almost 100% participation, what it means is that the amount of cedi supply in the form of interest and principal payments will reduce and this should reduce the imbalance in the forex market. The outlook for a tighter cedi liquidity is being priced into the market, supporting the local currency, he said”.
Cedi strengthens in value against dollar; 1$ now ¢13.70
The local currency went for 13.70 to one US dollar on Tuesday December 6, 2022.
This was immediately after the announcement of the Debt Exchange Programme on Monday December 5, 2022..