What Is the GHC (Ghanaian Cedi)?
GHC is the abbreviation for the Ghanaian cedi, the official currency of the Republic of Ghana. The GHC debuted on July 1, 2007. The Ghanaian cedi may also use the symbol GHS. As of mid-2020, one Ghanaian cedi equaled about 17 U.S. cents. Alternatively, it took about 5.89 Ghanaian cedis to equal one U.S. dollar.
The word "cedi" derives from the Akan word for cowry shell, once used as a medium of exchange, store of wealth, and religious article until British colonizers demonetized it as a form of currency in the early twentieth century. One cedi can be divided into 100 pesewas.
- The Ghanian cedi (GHC) is the official currency of Ghana.
- Ghana has re-issued its currency several times since 1965 due to high inflation and ballooning sovereign debt.
- Ghana is an important West African economy, producing cocoa, gold, oil, and bauxite.
Understanding the Ghanian Cedi
Ghana's national currency got its start in 1965, when the country abandoned the British pound, eight years after the country gained independence from the U.K. Following a coup, the new government replaced the original cedi in 1967, due in part to very high inflation. The Bank of Ghana again re-denominated the cedi in 2007 for similar reasons. The GHC continued to lose value at a rapid rate throughout the early 2010s, although its volatility ebbed to a degree beginning in late-2015, following a $918 million loan from the International Monetary Fund (IMF) that supported job growth and kept alive social spending programs.
Banknotes currently are issued in 1, 2, 5, 10, 20, 50, 100, and 200 GHC denominations. The currency is overseen and issued by the Bank of Ghana.
Influences on the Ghanaian Cedi
The cedi fluctuates partly due to policies set by the Bank of Ghana and its cycle of debt spending. For example, foreign nations forgave a large portion of the country’s national debt in 2005, but the debt crept back up again, leading to renewed currency valuations.
Following its 2015 loan to the Bank of Ghana, IMF officials sought to contain government expenditures, instill more fiscal discipline, improve budget transparency, and renew efforts at revenue collection. However, significant public spending still remains necessary to maintain social programs.
Additionally, both the economy and the currency vacillate based on the price of oil. The country is a significant producer, with approximately 2.5 billion barrels of proven oil reserves. In addition, oil is an input for the country’s manufacturing industry, which produces many inexpensive consumer products made of plastic.
Forex traders remain interested in Ghana, which ranks high among West African nations on a GDP per capita basis. It is also among the fastest-growing frontier economies in the world. The country is Africa’s largest gold producer, ahead of South Africa and Sudan. It also produces cocoa, diamonds, and minerals for making aluminum and steel. However, the Bank of Ghana sometimes limits access to those who trade the cedi. It last did so in 2014, which bank officials said was an effort to gain reparation of export proceeds.