Many analysts predict that the Ghana cedi would strengthen versus the US dollar and other significant foreign currencies as the prognosis for Ghana’s debt sustainability becomes more clear.
On December 5, 2022, the government outlined the specifics of Ghana’s debt swap program.
After that, the local currency kept getting better despite Moody’s previous week’s downgrading of its rating.
At a press conference, the Ministry of Finance outlined the debt exchange scheme, which includes grouping all outstanding bonds into four bonds and postponing the maturity dates of all bonds as of December 1, 2022, to 2027, 2029, 2032, and 2037.
This debt exchange program’s coupon payments are 0% in 2023, 5% in 2024, and 10% from 2025 till maturity.
The cedi, however, appreciated marginally as a result of these facts, ostensibly as a result of Ghana’s favorable prognosis for its debt sustainability.
Analysts also think that the Federal Reserve’s (Fed) thought of slowing policy rate increases contributed to investors’ perception that the Fed is getting closer to a rate peak.
The dollar fell against a basket of currencies on Thursday as a result of unfavorable sentiment on a potential drop in rates. In light of these circumstances, Databank Research predicted that the Ghana cedi would strengthen more this week.
The local currency, especially the dollar lately, had been rather stable.
On the retail market, it increased by 3.12% against the dollar, 0.88% against the pound, and 3.79% against the euro week over week.
Fast-forwarding almost a day from the government’s announcement of the Debt Exchange Program, the Ghana cedi appreciated versus the US dollar.
Source: newsthemegh.com