Bloomberg has reported that the Ghana Cedi last week posted the world’s biggest gain against the US Dollar as Ghana starts reorganising local debt.
It said the Ghana cedi took the title of the world’s best performer against the dollar last week amid optimism the country was moving closer to unlocking an International Monetary Fund bailout.
“The cedi has rallied 10 percent in the past five days, the biggest advance among about 150 currencies tracked by Bloomberg. That’s a turnaround for an exchange rate that had lost half of its value this year and occupied the bottom slot in the charts,” the report stated.
The gains came even as Ghana put its local-currency sovereign bonds in what Fitch Ratings described as a “default-like process,” and the holders of its dollar bonds braced for capital losses. The restructuring is needed to put Ghana’s debt on a sustainable path and secure a $3 billion IMF loan.
“The currency was the cheapest in Africa, more than 30% undervalued versus its 25-year history last week, so some rebound after the huge fall recently isn’t that surprising,” said Charles Robertson, the global chief economist at Renaissance Capital Ltd. in London. “Also we have the IMF in town, which should pave the way for dollar support,” it added.