BoG: Cedi Selling At ₵8 To Dollar
The Ghana cedi is making the mark as it continues to appreciate against major trading currencies in the world.
According to the Interbank forex rates from the Bank of Ghana (BoG), the cedi is now selling at ₵8.0055p and bought at GH₵7.9975 against the dollar; selling at ₵8.5370 and bought at ₵8.5292p against the euro; and selling at ₵9.8115 and bought at ₵9.8009 against the pound as of the end of Thursday, December 15.
The cedi depreciated by 54% since the beginning of the year and was crowned the worst-performing currency against the dollar in October by Bloomberg.
But last week Bloomberg found the Ghana cedi to be the world’s biggest gain against the US dollar.
It reported that the cedi had appreciated by 10% then- the biggest advance among about 150 currencies tracked by Bloomberg.
In an interview during a roundtable discussion organised by the Citizens Coalition in Accra, Economist, Prof. Godfred Bokpin said the cedi’s gain may be short-lived.
“Because it is not driven by strong economic fundamentals, you cannot say it is going to last. But at least, what we have seen is good. It means the system is responding to the changes,” Prof. Bokpin said according to Citi news.
For now, the cedi continues to do better and this has been attributed to the announcement of the domestic debt exchange programme of the government as well as the Staff-Level Agreement with the International Monetary Fund (IMF).
“The Ghana cedi started to see gains against the major trading currencies after the government launched the domestic debt exchange programme. This contributed to easing the pressures as the improved visibility of Ghana’s economic outlook calmed investors’ fears around the cedi”, a report by Databank said according to JoyNews.
Domestic Debt Exchange Programme
On December 4, Finance Minister Ofori Atta announced a domestic debt exchange programme that will transition the country to debt sustainable levels.
The programme was launched on December 5 where he noted that 137 billion of the country’s domestic debt needs to be restructured to get the country’s debt to a sustainable level.
He explained that “under the Programme, domestic bondholders will be asked to exchange their instruments for new ones. Existing domestic bonds as of 1st December 2022 will be exchanged for a set of four new bonds maturing in 2027, 2029, 2032 and 2037. The annual coupon on all of these new bonds will be set at 0% in 2023, 5% in 2024 and 10% from 2025 until maturity. Coupon payments will be semi-annual.”
The country’s debt as of the end of September 2022 stood at GH¢467,371.31 million (US$48,871.34 million) according to provisional results.
The domestic debt exchange programme has been rejected by some stakeholders including the Chamber of Corporate Trustees of Ghana, the National Association of Graduate Teachers (NAGRAT), the Ghana Registered Nurses and Midwives Association (GRNMA), the Ghana Medical Authority (GMA) and the Technical University Teachers Association (TUTAG).
IMF-GoG SLA
On Monday, the IMF announced an SLA with the government of Ghana on a three-year program supported by an arrangement under the Extended Credit Facility (ECF) for about US$3 billion.
The economic program aims to restore macroeconomic stability and debt sustainability while laying the foundation for stronger and more inclusive growth, the IMF said in a statement.
The staff-level agreement is subject to IMF Management and Executive Board approval and receipt of the necessary financing assurances by Ghana’s partners and creditors, IMF Mission Chief for Ghana, Mr Stéphane Roudet noted.
He pointed out that the Ghanaian authorities have committed to a wide-ranging economic reform program, which builds on the government’s Post-COVID-19 Program for Economic Growth (PC-PEG) and tackles the deep challenges facing the country.
Source: opemsuo.com/Hajara Fuseini
