The Minister of Finance, Ken Ofori-Atta, has said that Ghana is experiencing relative stability in some macroeconomic variables, a day after signing a US$3 billion support from the International Monetary Fund (IMF).
The minister made this statement during a joint press conference to elaborate on details of the IMF bailout today (May 18, 2023).
“We are already seeing relative stability in the currency and inflation and revitalizing our economy. Government, with support from the IMF and collective effort with Ghanaians, will work through our current challenges and emerge stronger,” Mr Ofori-Atta said whilst thanking the fund for their intervention.
The IMF Board unanimously approved Ghana’s bailout on Wednesday, May 17, at a meeting in Washington after Ghana secured the Paris Club financing assurance on Friday, May 12.
The impact of the deal on the markets is an appreciation in the value of the Ghana Cedi, which has been ranked as the best-performing currency worldwide.
The Ghana Cedi has outperformed all other global currencies against the US dollar over the past six months, bolstered by investor confidence in the country’s potential approval for a US$3 billion bailout from the International Monetary Fund (IMF).
According to Bloomberg’s currency tracker, the Cedi’s remarkable 33% gain since November marks the highest among approximately 150 tracked currencies.
Bloomberg indicated the Cedi strengthened by 5.3% on May 15, 2023, the most since April 3, 2023.
It actually gained 5.0 pesewas to the dollar on the retail market to sell at ¢11.90 on May 15, 2023.
Investors have also enjoyed strong returns from Ghana’s dollar bonds, delivering nearly 12%, surpassing the 3.6% average for emerging and frontier markets in a Bloomberg index.
Reports have indicated optimism about the forthcoming IMF board meeting, stating that the initial US$600 million tranche is expected immediately upon approval.
Subsequently, another US$600 million will follow in November, with the remaining funds disbursed in equal portions of US$350 million every six months, subject to IMF reviews.
The positive sentiment surrounding the bailout has contributed to the Cedi’s recent strengthening, with the expectation that it may trade below GH10 against the US dollar.
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