As wait-and-see investors continued to inject foreign cash into the West African nation prior to its agreement with the International Monetary Fund, the cedi in Ghana fell to the worst-performing currency in the world against the dollar.
The second-largest producer of cocoa in the world saw its currency decline 2% on Monday to 11.2625 per dollar, bringing its annual losses to 45.1%, the highest rate among 148 currencies.
The Sri Lankan rupee, which is now the second-worst performer this year after falling 44.7% against the dollar, swapped places with the currency that got its name from the Akan word for cowrie shell in the area, “sedie.”
Although Ghana first communicated with the IMF in July 2022, actual talks for an extended credit facility arrangement with the lender didn’t commence until last month.
To boost its finances and sustain its balance of payments, the nation hopes to receive up to $3 billion in loans over a three-year period under the agreement.
After domestic policies, such as reducing 2022 discretionary spending by up to 30%, failed to stop a selloff in its international bonds, Ghana changed course and turned to the IMF for assistance.
Investor demand for holding Ghanaian debt has increased to 2,669 basis points over US Treasury bonds.