Ghana’s currency weakened, extending Africa’s worst currency decline in 2015, as concerns increased about the government’s ability to narrow a budget shortfall.
The cedi dropped as much as 0.6 percent to 3.89 per dollar before paring its decrease. The currency was trading at 3.8735 per dollar as of 2:09 p.m. in the capital, Accra, the lowest level on a closing basis since Aug. 25. The cedi plunged 17 percent this year, the most among 24 African currencies tracked by Bloomberg.
“Investors are asking what the road map” is to fixing the country’s fiscal issues, Sampson Akligoh, managing director of Accra-based InvestCorp Ltd., a money manager, said by phone. The strategy “is a bit unclear. That appearance is creating uncertainty,” he said.
Ghana’s government signed a three-year deal this year with the International Monetary Fund for a loan of about $1 billion to support the currency and narrow a fiscal gap that’s remained near 10 percent of gross domestic product for more than three years.
The economy expanded at the slowest pace in 20 years in 2014 and growth will probably slow further because of low oil prices and inflation that is near a five-year high. The Bank of Ghana will meet next week and announce its decision on the benchmark policy rate, which it has raised 500 basis points, or 5 percentage points, to 21 percent since October 2013.