Ghana’s cedi has become the world’s top-performing currency against the dollar over the last six months, due to growing investor confidence in the country’s ability to secure a $3bn bailout from the International Monetary Fund (IMF).
The cedi has risen by 33% in value since November 2020, making it the biggest winner among approximately 150 global currencies, while Ghana’s dollar bonds have provided investors with a return of nearly 12%, compared to the 3.6% average among emerging markets.This news comes ahead of an IMF board meeting set to take place in Ghana on Wednesday, during which the board is expected to green-light the initial $600m tranche of the country’s bailout programme. The remaining $2.4bn will be disbursed in equal portions over the next few years, subject to IMF reviews.
The strong performance of the cedi and Ghana’s dollar bonds is a positive sign for the country’s economy and reflects the confidence that investors have in its future prospects. However, there are still challenges that Ghana needs to address, including its reliance on commodity exports and the need to diversify its economy.