The International Monetary Fund (IMF) and Ghana are expected to announce a staff-level agreement on a loan deal today, Tuesday, December 13, after several months of talks for a $3 billion bailout.
The agreement to be made known this morning will pave the way for the Board of the Fund to consider and possibly approve a programme for the country.
Ghana turned to the IMF in July for a $3 billion three-year bailout as the country’s economy is experiencing its worst crisis in twenty years.
The cocoa, gold, and oil-producing West African nation has said it needs the deal by the end of the year.
The government has started restructuring its debt by introducing a plan to replace $10.5 billion in local bonds with new ones. This move has been met with vehement opposition from both organized labor and the general public.
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The Ghanaian Cedi, meanwhile, was listed as the world’s best performing currency last week.
This report according to Bloomberg revealed that the rise in currency value is coming alongside optimism of realizing the $3 billion bailout the country has been requesting from the International Monetary Funds for months.
“The cedi has rallied 10% in the past five days, the biggest advance among about 150 currencies tracked by Bloomberg. That’s a turnaround for an exchange rate that had lost half of its value this year and occupied the bottom slot in the charts.”
“The currency was the cheapest in Africa, more than 30% undervalued versus its 25-year history last week, so some rebound after the huge fall recently isn’t that surprising,” said Charles Robertson, the global chief economist at Renaissance Capital Ltd. in London. Also we have the IMF in town, which should pave the way for dollar support,” the report read.
