Ghana’s cedi extends world-beating loss on debt talk worries

Ghana’s cedi extended the world’s biggest loss versus the dollar this year amid uncertainty about talks with domestic bondholders.

The currency depreciated as much 9.6% on Thursday, heading for its biggest decline in 22 years.

That took losses in 2022 to nearly 52%, the worst performance among 148 currencies tracked by Bloomberg

Ghana formed a committee this month to hold talks with domestic bond investors to collect views for a debt management strategy it is fashioning to guide ongoing negotiations with the International Monetary Fund.

The country is hoping to receive up to $3 billion under the extended credit facility program it is seeking from the IMF, to spur its finances and regain access to the international capital market.

“There are local investors who now want to invest in the foreign currency rather than hold cedi bonds because we don’t have any communication concerning how the restructuring will go,” said Gabriel Engmann, a currency trader at Accra-based GCB Bank Ltd., the West African nation’s biggest domestic lender.

“So people now discount their bills just to buy foreign currency and hold on to it,” he added.

The cedi traded down to 13.1250 per dollar, a record low. Demand for the greenback in the second-largest cocoa producer was also spurred by importers looking to stock goods before Christmas.

While a special window created by the Bank of Ghana to sell dollars to oil marketing companies to import oil and gas is helping them, the companies are still “huge” on the general market, Engmann said.

Source: norvanreports.com