The Ghana cedi has continued to demonstrate a strong performance against the US dollar in recent weeks, with the local currency improving in value against the American currency on March 23, 2022.
This comes as the cedi started the week selling at GHS 12.60 to one American greenback, but is now going for GHS 12.40, narrowing its year-to-date loss to the US dollar to approximately 17%.
This impressive performance has been attributed, in part, to the recent upgrade of Ghana’s credit rating by Fitch Ratings agency. The credit rating has been upgraded to ‘CCC’ from ‘RD’, and Fitch attributes the upgrade to the completion of the Domestic Debt Exchange Programme by Ghana in February 2023 and the resumption in payments on local currency bonds that cures the default on LC debt.
This positive announcement has boosted market sentiments and reduced demand for the dollar and other major foreign currencies.
Although the Ghana cedi is demonstrating a strong performance against the US dollar, it is still depreciating against other major foreign currencies.
At present, the cedi is going for GHS 14.90 and GHS 12.90 against the pound and the euro, respectively. This may indicate that the cedi is not experiencing a broad-based appreciation, but rather a relative improvement against the dollar.