The Ghanaian cedi has fallen by a staggering 64.45% against the US dollar. The USD/GHS exchange rate was 9.9495. Despite Ghana’s central bank raising its interest rate to a record-high of 22% in an effort to reduce inflation and strengthen the Cedi, the currency has depreciated.
Concerns about the effects of a worldwide slowdown in demand for commodities like; cocoa have led investors to sell the cedi and the country’s bonds this year. These changes fueled a spike in inflation and forced Ghana to start negotiations with the IMF in July for a $3 billion rescue package.
Additionally, the Bank of Ghana works with foreign oil firms, mining companies; enabling authorized bankers to buy all foreign currency which results from the voluntary repatriation of export earnings; from mining and oil corporations in order to enhance the amount of foreign currency available to the economy. The success of the central bank’s foreign exchange auctions in raising the value of the Cedi is yet to be determined.