In 2020, the cedi was the best performing currency against the dollar at the start of the year, gaining 7.3% by mid-February. Try demo Cedi plunges on economic pressures In addition to being the world’s second largest cocoa producer, Ghana also exports crude oil and gold. Like other emerging market currencies, the cedi’s value is driven by the country’s trade balance, foreign currency reserves, gross domestic product ( GDP) growth and monetary policy, as well as foreign investment flows and commodity prices. Over the past 15 years it has lost more than 90% of its value. The Ghana cedi was introduced at a rate of 1:10,000, becoming the highest-denominated currency in Africa. The new cedi was introduced after a coup in 1967 and re-denominated in 2007 after decades of high inflation had devalued the currency. The cedi was introduced after the country left the British pound ( GBP) system in 1965. The Ghanaian cedi is the official currency of the Republic of Ghana. What drives the value of the Ghanaian cedi? What is the outlook for the currency of the world’s second largest cocoa producer? We look at the drivers for the cedi’s value and forecasts for its future performance. Rising fuel prices sparked protests on 19 October, led by the Ghana Union of Traders Association (GUTA). The Ghanaian government has been forced to seek assistance from the International Monetary Fund ( IMF) as it faces soaring inflation, high debt, rapidly rising interest rates abroad and falling prices for cocoa – one of its major exports. Over 25% of that loss has come in October alone as the decline in the cedi has accelerated at its sharpest rate since it was re-denominated 15 years ago. The value of the Ghanaian cedi ( GHS) has fallen 56% this year against the US dollar (USD) to become the world’s worst performing currency. The Ghanian cedi was introduced after the country left the British pound system in 1965 Photo: Maksym Kapliuk / Shutterstock
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