Ghana’s cedi appreciates as $1 hits GH¢10.70

The Ghana cedi has in less than five hours today, December 14, 2022, gained 5.6% value against the US dollar, resulting in a cumulative gain of approximately 33.6% in the month of December alone.

$1 is now trading at an average rate of ¢10.70 with a market range spanning GH¢10.70 to GH¢11.28.

This put the cedi as the strongest performing currency against the American ‘greenback’ in December 2022.

The cedi slumped by more than 54% against the dollar before December 2022.

However, it has strengthened by more than 33% since the beginning of December 2022 after Finance Minister, Ken Ofori-Atta, launched the government’s domestic debt exchange programme, followed by the latest announcement of the International Monetary Fund’s staff-level agreement of a bailout package worth $3 billion.

The US Federal Reserve has also eased its monetary policy tightening as inflationary pressures reduce with a fear of recession in 2023.

After more than four months of negotiations, Ghana finally sealed a $3 billion programme with the Bretton Wood institution, pending the approval of its Executive Board.

According to Stéphane Roudet, Mission Chief for Ghana, his team “reached staff-level agreement with the Ghanaian authorities on a three-year program supported by an arrangement under the Extended Credit Facility (ECF) in the amount of SDR 2.242 billion or about $3 billion”.

The Extended Credit Facility (ECF) provides financial assistance to countries with protracted balance of payments problems. The ECF was created under the Poverty Reduction and Growth Trust (PRGT) as part of a broader reform to make the Fund’s financial support more flexible and better tailored to the diverse needs of low-income countries (LICs), including in times of crisis. The ECF is the Fund’s main tool for providing medium-term support to LICs.