Ghanaian cedi now one of the world’s worst-performing currencies; country looks to IMF for salvation

Posted by News Express | 5 August 2014 | 4,401 times

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Ghana is hoping for financial aid from the International Monetary Fund (IMF) to help strengthen its currency after the cedi fell 40% against the US dollar, making it one of the world’s worst-performing currencies.

“Ghana, once seen as a shining example of economic strength in the region, is also struggling with high inflation,” says a BBC report.

The report recalls that the West African country last went to the IMF for help in 2009, when it secured a $600m three-year aid package.

“Despite being a major exporter of gold, oil and cocoa, Ghana is struggling with large current account and budget deficits,” says BBC.

The country’s finance minister had last week told the BBC that the country would fix its currency problems itself and only go to the IMF as a last resort.

“Many experts see the decision to go to the IMF as the first admission by the government that the economy is in bad shape,” says the report. “Commentators said the move would force the government to take stronger action to tackle rising deficits and inflation.”

Leading financial analyst Razia Khan of Standard Chartered Bank is quoted as saying: “An IMF programme is likely to give to investors that additional level of confidence that fiscal consolidation might be pursued more seriously. However, news of potential talks with the IMF is unlikely to be enough, on its own, to make a meaningful difference to the cedi just yet.”

•Photo shows President John Mahama of Ghanaian.

Source: News Express

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