The Ghana cedi, the world’s best-performing currency against the dollar this year, extended its advance on Monday as investors await a Eurobond sale that would bolster the government’s coffers.
The currency of the world’s second-biggest cocoa producer has strengthened 3.9% in 2020, the most among more than 140 currencies tracked by Bloomberg, a turnaround from last year, when it weakened 13%.
The coronavirus outbreak and the recent lunar new year holiday in China has cut back travel and trade, reducing demand for foreign currency from Ghanaian importers, according to Nana Yaa Faakye, Head of Treasury at Republic Bank Ghana Ltd. The West African country is concluding a series of meetings with international bond investors Monday for a sale of as much as $3 billion in Eurobonds.
“With the impending Eurobond issuance, which is likely to increase foreign reserves, some buyers are betting that the cedi will strengthen further,” Faakye said.
The central bank’s tight monetary stance is also supporting the currency, said Steve Opata, head of financial markets at the Bank of Ghana. Market reforms including the introduction of forward-rate foreign exchange auctions since October, with a target of $715 million this year, are another factor in favor of cedi gains, he said.
“The country’s high nominal interest rates matter to investors as it will give them some immunity when the currency depreciates,” Stephen Bailey-Smith, a investment strategist at Kolding, Denmark-based Global Evolution, said by phone. “We have obviously seen some guys come back into the market.”
Latest Stories
-
Mahama promises to enhance ‘Okada’ business with electric tricycles, maintains need for legalisation
5 mins -
Ghana’s land litigation concerns presents threat to solar energy projects
12 mins -
African Games 2023: Joseph Commey makes semis; Walid Omar, two others eliminated in boxing event
17 mins -
African Games: Ghana’s men’s doubles duo one win from medal zone
18 mins -
More tough times ahead for Ghana’s cedi; cedi is 3rd worst currency in Africa – Bloomberg
21 mins -
IMF Boss urges Ghana to foster inclusive society amid anti-LGBTQ+ legislation
30 mins -
Recent depreciation of cedi not worrying; trend to reverse soon – Prof Turkson
33 mins -
We won’t allow aliens to elect our MP for us anymore – Effutu NDC PC James Kofi Annan
35 mins -
It is not a crime to show foreign movies during prime time – Lawyer
36 mins -
The era of omnichannel retailing and the faith of conservative brands
48 mins -
Extend mentoring to less privileged areas – Women in Engineering urged
57 mins -
Admaius Capital partners with Egyptian medicated-cosmetics business Parkville
1 hour -
Clean energy advocates want intensified efforts to achieve 10% renewable energy target amid recent power cuts
1 hour -
GRA urges public collaboration to expose tax evaders
1 hour -
GIADEC, Mytilineos S.A. set to begin exploration on project 3 of Nyinahin bauxite concession
1 hour