Ghana’s Cedi Is the Year’s Biggest Winner Against the U.S. Dollar
By Moses Mozart Dzawu
February 3, 2020, 7:33 AM EST
Updated on February 3, 2020, 9:39 AM EST

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Ghana’s cedi, the world’s best-performing currency against the dollar this year, extended its advance on Monday as investors await a Eurobond sale that would bolster the government’s coffers.

The currency of the world’s second-biggest cocoa producer has strengthened 3.9% in 2020, the most among more than 140 currencies tracked by Bloomberg, a turnaround from last year, when it weakened 13%.

The coronavirus outbreak and the recent lunar new year holiday in China has cut back travel and trade, reducing demand for foreign currency from Ghanaian importers, according to Nana Yaa Faakye, Head of Treasury at Republic Bank Ghana Ltd. The West African country is concluding a series of meetings with international bond investors Monday for a sale of as much as $3 billion in Eurobonds.
Ghana's cedi is the world's best-performing currency in 2020

“With the impending Eurobond issuance, which is likely to increase foreign reserves, some buyers are betting that the cedi will strengthen further,” Faakye said.

The central bank’s tight monetary stance is also supporting the currency, said Steve Opata, head of financial markets at the Bank of Ghana. Market reforms including the introduction of forward-rate foreign exchange auctions since October, with a target of $715 million this year, are another factor in favor of cedi gains, he said.

“The country’s high nominal interest rates matter to investors as it will give them some immunity when the currency depreciates,” Stephen Bailey-Smith, a investment strategist at Kolding, Denmark-based Global Evolution, said by phone. “We have obviously seen some guys come back into the market.”

MumuCountry:
Ghana’s Cedi Is the Year’s Biggest Winner Against the U.S. Dollar
By Moses Mozart Dzawu
February 3, 2020, 7:33 AM EST
Updated on February 3, 2020, 9:39 AM EST

Sign up to our Next Africa newsletter and follow Bloomberg Africa on Twitter

Ghana’s cedi, the world’s best-performing currency against the dollar this year, extended its advance on Monday as investors await a Eurobond sale that would bolster the government’s coffers.

The currency of the world’s second-biggest cocoa producer has strengthened 3.9% in 2020, the most among more than 140 currencies tracked by Bloomberg, a turnaround from last year, when it weakened 13%.

The coronavirus outbreak and the recent lunar new year holiday in China has cut back travel and trade, reducing demand for foreign currency from Ghanaian importers, according to Nana Yaa Faakye, Head of Treasury at Republic Bank Ghana Ltd. The West African country is concluding a series of meetings with international bond investors Monday for a sale of as much as $3 billion in Eurobonds.
Ghana's cedi is the world's best-performing currency in 2020

“With the impending Eurobond issuance, which is likely to increase foreign reserves, some buyers are betting that the cedi will strengthen further,” Faakye said.

The central bank’s tight monetary stance is also supporting the currency, said Steve Opata, head of financial markets at the Bank of Ghana. Market reforms including the introduction of forward-rate foreign exchange auctions since October, with a target of $715 million this year, are another factor in favor of cedi gains, he said.

“The country’s high nominal interest rates matter to investors as it will give them some immunity when the currency depreciates,” Stephen Bailey-Smith, a investment strategist at Kolding, Denmark-based Global Evolution, said by phone. “We have obviously seen some guys come back into the market.”

So how much is 1 cedi to 1 dollar

All this lie lie statistics. Ghana's Per Capita Income is less than $2000. They should focus on improving that.

Hypnotise:

So how much is 1 cedi to 1 dollar

The current govt came to power and it was 3.76 GHS to 1 USD.

It is now 5.43GHS to 1 USD. It was almost hitting 6GHS, but the influx of people in December and the year of return celebrations made the country awash with foreign exchange, which eased pressure on the cedi. The recent Jan 2020 gains were not a result of any economic policies.

Obviously APC has a lot of friends who have copied its example all over Africa. They promise, they fail and then they lie and start dishing out propaganda. Go to Ghana and see how people are complaining. The discontent is real.

My guy, I am Ghanaian and I live in Ghana. Ghana’s per capital is less than $2,000? What was the figure a few years ago? You will agree that there has been significant improvement. Generally, the economy is doing great, growing at more than 6%.

There are some factors you have to take into account in establishing whether things are getting better or not in Ghana. Do you know how much Ghanaians pay for a liter of petrol? Do you know how much Ghanaians pay for VAT? Even electricity charges in Ghana are far higher than in Nigeria. But we make these sacrifices expecting the government to deliver on providing the environment for Ghanaians to thrive economically.

Today, the government provides free education to Ghanaians from primary to secondary. The government even feeds them, clothes them and provide some basic needs of pupils. There are tangible improvements in living standards. It is very slow, but at least the country is making progress.

Life is difficult in most parts of the world. I travel a lot and I have come to realize that life can very tough in countries that are supposedly very rich, if you are not gainfully employed. The challenge for African states is therefore empowering the people. If the people are working and earning good morning, nobody will complain.

ogtavia:
All this lie lie statistics. Ghana's Per Capita Income is less than $2000. They should focus on improving that.

MumuCountry:
My guy, I am Ghanaian and I live in Ghana. Ghana’s per capital is less than $2,000? What was the figure a few years ago? You will agree that there has been significant improvement. I have my own business here in Ghana, and I am doing very well. Generally, the economy is doing great, growing at more than 6%.

There are some factors you have to take into account in establishing whether things are getting better or not in Ghana. Do you know how much Ghanaians pay for a liter of petrol? Do you know how much Ghanaians pay for VAT? Even electricity charges in Ghana are far higher than in Nigeria. But we make these sacrifices expecting the government to deliver on providing the environment for Ghanaians to thrive economically.

Today, the government provides free education to Ghanaians from primary to secondary. The government even feeds them, clothes them and provide some basic needs of pupils. There are tangible improvements in living standards. It is very slow, but at least the country is making progress.

Life is difficult in most parts of the world. I travel a lot and I have come to realize that life can very tough in countries that are supposedly very rich, if you are not gainfully employed. The challenge for African states is therefore empowering the people. If the people are working and earning good morning, nobody will complain.

True, I agree with everything you have said. My point is that, it's quite erroneous to use the exchange rate of a currency to the dollar as an index for economic growth. There are factors that contribute to the value of a currency especially against the dollar i.e gdp, export/import volume, devaluation and inflation. One Ghana cedi exchanges for about $0.18 but is the purchasing power the same? A huge No...I wish Ghana all the best in the quest to improve their economy but the major focus shouldn't be on the exchange rate to the dollar but on how robust their economy is. If the value of export somehow equals that of import, the dollar will crash hugely. This is one area where Naira loses value the most.