Bond market endorses Ghana as cedi surges to best-performing currency in the world

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Reforms started by the West African nation three years ago bear fruit as Ghana becomes the best-performing African market

bloomberg.comMidway through the final quarter of 2019, investors looking at Ghana saw a slowing economy, creeping inflation and a currency that had declined against the dollar for 25 straight years. Barely six weeks into the new year, the picture has changed.

Investors demonstrated that vote of confidence when they placed orders for almost five times the amount on offer at Ghana’s Eurobond sale two weeks ago, pushing the yield down well below the initial price target. And at the first local-currency bond sale of the year on January 16, foreign investors bought more than 80% of the 1.4-billion cedis of securities, compared with average holdings of 37% over the past two years.

“Investors seem confident that the central bank is on top of its game,” Anthony Asare, head of Treasury at GCB Bank, said by phone. “When it comes to the budget they sort of believe it’ll be consistent with fiscal restraint, even though it is an election year.”

 

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