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Cedi Falls to Record as Foreign Investors Shun Ghana Bonds

  • Rate cut, dovish tilt by central bank weighs on currency
  • Foreign-investor demand for cedi bonds drops in January
Updated on

Ghana’s currency slumped to a record against the dollar after a dovish tilt by the nation’s central bank reduced the appeal of fixed-income assets, sapping foreign-investor demand for the country’s bonds.

The cedi has weakened 8.6 percent this year, the most among more than 140 currencies tracked by Bloomberg, after the central bank unexpectedly cut its benchmark rate in January and signaled more easing may be in store. Out of the 2.1 billion cedis ($391 million) of two-year and longer-dated maturities sold by the government through Jan. 31 this year, foreign investors bought just 6.3 percent, according to data from the Central Securities Depository Ghana Ltd. That compares with more than 30 percent in 2018.