Professor of Applied Economics at America’s John Hopkins University has declared the Ghana Cedi as a junk currency.
He has thus, classed it into a category of currencies in his rogue gallery of junk currencies as announced in a tweet dated March 11, 2023.
According to Hanke, a serial critic of the government and its management of the Ghanaian economy, the cedi’s woes should be blamed on Nana Addo Dankwa Akufo-Addo’s incompetence and economic mismanagement.
“In #Ghana, the #cedi is junk. By my measure, the cedi has depreciated ~49.77% against the USD since Jan. 1, 2022. Thanks to Pres. Akufo-Addo’s incompetence & economic mismanagement, the cedi has been entered into my rogue’s gallery of JUNK currencies,” his tweet read.
As of last Friday, March 10, 2023, the Interbank forex rates from the Bank of Ghana showed that the Ghana Cedi was trading against the dollar at a buying price of 11.0082 and a selling price of 11.0192.
At a forex bureau in Accra, the dollar is being bought at a rate of 12.20 and sold at a rate of 12.80.
In #Ghana, the #cedi is junk. By my measure, the cedi has depreciated ~49.77% against the USD since Jan. 1, 2022. Thanks to Pres. Akufo-Addo’s incompetence & economic mismanagement, the cedi has been entered into my rogue’s gallery of JUNK currencies. pic.twitter.com/0ifxnyfUpF
— Steve Hanke (@steve_hanke) March 11, 2023
Government working to attain IMF bailout
Government run to the International Monetary Fund (IMF) in 2022 at a time the economy was in a downward spiral.
The government only recently secured a Domestic Debt Exchange Programme (DDEP), which according to experts is a major conditionality of the lender in granting Board approval for a US$3 billion bailout.
The programme was meant to ensure the streamlining of Ghana’s unsustainable debt. Government announced an 85% participation rate.
Ghana is hoping to get the first tranche of the bailout by March this year in order to among others rein in inflation and arrest the galloping depreciation of the cedi.
Talks are currently underway with Ghana’s external creditors in a bid to restructure loans in order to get IMF Board approval in March 2023.