World’s Worst Performing Currency, the Cedi, Reverses Gains — Economist Steve Hanke Says Ghana Inflation Now Over 140%

Just days after registering marginal positive aspects in opposition to the U.S. greenback, the Ghanaian forex — the cedi — slipped to C14:$1 versus the U.S. greenback on the overseas trade parallel market on Nov. 7. The cedi’s reversal is alleged to have dented the forex’s restoration prospects. On the opposite hand, Ghana’s former president John Mahama and economist Steve Hanke have recommended that the nation’s inflation charge is way greater than the 37.2% which was recorded in September.

Cedi’s Interbank Exchange Rate Unchanged

Just days after it marginally recovered from an all-time low, the Ghanaian forex’s trade charge versus the U.S. greenback slipped past the 14:1 mark on Nov. 7, a report has stated. According to the report, the cedi’s fall from C13.95 to C14.20 per greenback on the foreign exchange parallel market recommended that the forex’s much-talked-about restoration versus the buck is unlikely to occur any time quickly.

Bank of Ghana Exchange Rates pic.twitter.com/oognH3AM42

— Bank of Ghana (@thebankofghana) November 4, 2022

Despite its newest fall versus main world currencies on the parallel market, the Bank of Ghana (BOG)’s Nov. 8 trade charge information confirmed the cedi was buying and selling at simply above 13 items for each greenback. In truth, for the reason that BOG’s Oct. 27 replace, the cedi’s interbank trade charge versus the greenback has remained largely unchanged.

Ghana’s Real Inflation Rate

After beginning the 12 months buying and selling above 6:1, the cedi, in response to the BOG, “has depreciated by 37.5 per cent, 24.1 per cent, and 27.5 per cent against the US dollar, the pound, and Euro, respectively.” The BOG blames greater crude oil costs, the “non-roll over of maturing bonds by non-resident investors,” in addition to coverage reversals, for the cedi’s woes.

The cedi depreciation has, in flip, seen the nation’s official inflation charge surge previous 37% in September. Despite this being the nation’s highest inflation charge in twenty years, President Nana Akufo-Addo was just lately quoted claiming that Ghana’s charge continues to be higher than that of Togo and Senegal.

However, former Ghanaian president John Mahama and Steve Hanke, a professor of utilized economics at Johns Hopkins University, have forged doubts over the genuineness of Ghana’s official inflation charge figures. While Mahama recommended that Ghana’s meals inflation is round 122%, Hanke positioned Ghana’s inflation charge at 142%, the world’s third-highest charge.

According to the economics professor’s newest inflation dashboard, the one international locations whose inflation charges surpass that of Ghana are Zimbabwe (417%) and Cuba (151%).

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